LEADING IN INNOVATION AND GROWTH

THE NORDIC CLUSTER: LEADING IN INNOVATION AND GROWTH WHITE PAPER September 2017 The asset manager for a changing world

If I have a thousand ideas and only one turns out to be good, I am satisfled. Alfred Nobel, Swedish inventor and founder of the Nobel Prizes.* This quote summarises the essence of Nordic innovation very well. Throughout history, the Nordic countries have consistently managed to overcome challenges in a creative and pragmatic manner. As a result they punch above their weight as world leaders in numerous domains. Not only have they come up with new inventions and become globally competitive but they have also been ready to make tough choices in order to ensure economic sustainability. Innovations from society to business and involving technology as a core enabler have been essential elements of the Nordic region's success. Examples of this are the solutions they have found to deal with ageing populations, sustainable development, and the organisation of a society in which almost all women work. In our view, these are compelling reasons for understanding and appreciating the investment opportunities in these small countries on the edge of Europe, which top international rankings for economic performance, innovation and social well-being. * Sweden was home to Alfred Nobel who invented dynamite in 1866 and founded the Nobel Prizes, perhaps the world s most prestigious awards inspiring innovation. Since 1901, the Nobel Prize ceremonies have taken place annually in Stockholm, except for the peace prize which is held in Oslo, Norway.

ABSTRACT The Nordic region (Sweden, Norway, Denmark, Finland and Iceland) has a collective population of 27 million and all Nordic countries are in the top 20 globally, measured on GDP per capita. 1 The Nordic region is strong and economically stable. Its nations are competitive and acknowledged for entrepreneurship, innovation and high mobile and broadband penetration. There are major local technology hubs established in the region, with Stockholm now boasting the highest number of software companies per capita in Europe and the second highest worldwide after the Silicon Valley in the US 2. As to its long-term commitment to innovation, the Nordic region has enjoyed higher economic growth than the rest of Europe over the past 20 years, which has been reflected in Nordic equity markets healthy performance. Also of benefit to Nordic companies is the stable political and technologically receptive environment. In recent years, several global enterprises from the Nordic region have achieved great success. The likes of Skype, Spotify, Rovio (Angry Birds) and King (Candy Crush) have paved the way for many new companies. These success stories are not only fuelling money back into the Nordic economic system, but also encouraging young talented people to choose careers within a start-up, rather than in large corporations. In short, the Nordic region is fertile ground for growth companies with global potential. What sets the Nordic countries apart? What are the drivers behind the strong economic growth in the Nordic region? How does innovation translate into long-term growth for Nordic companies? By answering some of these questions, we portray a region with attributes that distinguish it for global investors in a world where developed nations are subject to increasing turmoil. As a Nordic-based asset manager, Alfred Berg advises on investment themes such as Nordic innovation through its local investment centres in Stockholm, Oslo and Helsinki. To tell the story of the Nordic region s competitiveness, we decided to write a white paper on the innovative capacity of the Nordic countries and the role that innovation plays in the long-term growth of Nordic companies and economies as a whole. The content of this white paper is based largely on published research. The sources of the most important information and conclusions are included and available upon request. Enjoy the read and welcome to the Nordic Model of Innovation. ABOUT THE AUTHOR Cristina Lugaro Cristina is a Senior Investment Specialist at Alfred Berg Asset Management. Her area of responsibility is Nordic equities. Prior to her current role, Cristina focused on global quantitative equities at Alfred Berg and BNP Paribas Asset Management, where she led the global commercialisation of low-volatility strategies. Before joining Alfred Berg in 2008, she was a member of the Fortis Investments Marketing team in Belgium where she was responsible for marketing the Fortis global fund range and client service in Southern Europe. Cristina received an MBA with Honours from Solvay Business School and holds a Bachelor of Arts degree in International Affairs and Economics from Vesalius College (Vrije Universiteit Brussel) in Belgium.

4 - The Nordic cluster: leading in innovation and growth 12 6 PERFORMANCE OF THE NORDIC COUNTRIES NORDIC COUNTRIES AT A GLANCE NORDIC COUNTRIES ARE INNOVATION LEADERS WHY ARE NORDIC COUNTRIES SO INNOVATIVE? NORDIC INNOVATION IS THREEFOLD: SOCIETY Innovation: spill-over beneflts to economic development TECHNOLOGY Innovation as a core enabler BUSINESS Strong culture of innovation

The Nordic cluster: leading in innovation and growth - 5 26 NORDIC INNOVATION IN PRACTICE: COMPANY EXAMPLES AUTOLIV A global leader in automotive safety TOMRA SYSTEMS Leading the resource revolution ELEKTA Leading the future of radiation therapy AMBU A global leader in single-use medical devices 33 CONCLUSIONS

6 - The Nordic cluster: leading in innovation and growth PERFORMANCE OF THE NORDIC COUNTRIES NORDIC COUNTRIES AT A GLANCE ICELAND NORWAY SWEDEN FINLAND The Nordic countries make up a region in Northern Europe, which consists of five countries Denmark, Finland, Iceland, Norway and Sweden and their associated territories, the Faroe Islands and Greenland (Denmark) and the Åland Islands (Finland). They have a combined population of 27 million, spread over a land area of 3.5 million km². 3 If we put the Nordic countries in a wider international context, they look much the same: long common history, shared cultural values, small homogeneous populations and similar socio-economic models combining free-market capitalism with a comprehensive welfare state. Highly dependent on international trade, Nordic countries have evolved from poor, agrarian countries into modern industrialised ones which top international rankings on economic growth and social well-being. 4 In terms of international relations, the Nordic countries have, however, followed different routes. Finland is the only member of the European Union (EU) and the eurozone. Denmark and Sweden are in the EU but outside the eurozone. Sweden has a freely floating currency while Denmark pegs its currency to the euro. Norway is outside the EU, but part of the European Economic Area (EEA). 5 DENMARK Overall, Nordic countries have performed extremely well from a European perspective. The average employment rate in 2015 was 75.2% compared to the EU average of 64.5%. In terms of GDP growth, the Nordic region has outperformed the EU in 15 out of the 20 past years and forecasts indicate that the upward trend is set to continue. 6 Today, 38% of the Nordic region s energy supply comes from renewable resources, with the largest contributions coming from biomass and waste, hydro and wind power. 7 These positive results arise from the Nordic region s strong foundations. Having learned their lesson from the crisis that hit them in the early 1990s, Nordic governments have undertaken politically difficult reforms to maintain balanced budgets while still being able to afford social welfare benefits. For example, Sweden has a balanced budget requirement over a budget cycle. This requires setting a firm expenditure ceiling and then prioritising within that constraint. Denmark introduced reforms to index the retirement age to life expectancy and cut the duration of employment benefits by half to a maximum of two years. In addition, Denmark introduced a flexicurity 8 system designed to give Danish workers skills security instead of job security. As a result, Denmark registers the highest level of labour market flexibility, ranking among the ten most flexible economies in the world. 9 Recognised pioneers when it comes to pension and labour market reforms, Nordic countries are on a sustainable path for future generations. In addition, the Nordic countries benefit from a stable political environment where broad coalitions tend to ensure that a shift in government does not mean a major shift in policies. The healthy state and stability of the Nordic economies has given local entrepreneurs plenty of confidence to invest in new companies and ideas.

The Nordic cluster: leading in innovation and growth - 7 Nordic countries are on a sustainable path for future generations. FIGURE 1. High levels of prosperity GDP per capita, Current USD, PPP FIGURE 2. Strong economic growth GDP growth rate, percent 70 000 65 000 60 000 55 000 50 000 45 000 40 000 35 000 30 000 25 000 2005 2007 2009 2011 2013 2015 Source: OECD 2016 5,00 4,00 3,00 2,00 1,00 0,00-1,00-2,00-3,00-4,00-5,00-6,00 1997 1998 1999 2000 2001 2002 2003 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 (f) 2018 (f) 2004 Source: OCDE and Bloomberg, 2017 NORDIC EUROPEAN UNION Difference in GDP growth FIGURE 3. Balanced budgets Net lending/net borrowing, percentage of GDP, surplus (+), deficit (-) 25 20 15 10 5 0-5 -10-15 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 FIGURE 4. Low debt General government debt, percentage of GDP 140 120 100 80 60 40 20 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: European Commission 2016 Source: IMF 2016 NORWAY SWEDEN FINLAND DENMARK EUROZONE UNITED STATES UNITED KINGDOM

8 - The Nordic cluster: leading in innovation and growth If you had to be reborn anywhere in the world, you would want to be a viking. The Economist NORDIC COUNTRIES ARE INNOVATION LEADERS A century ago, Nordic countries were among the poorest nations in Europe. Today, the situation has reversed, with Nordics leading the charts in growth, competiveness and innovation. Although the Nordic countries have relatively small populations, they have made a big impact worldwide and are home to global iconic companies such as Ikea, H&M and Lego. For many years, the Nordic model has attracted positive global attention: If you had to be reborn anywhere in the world, you would want to be a viking, stated The Economist in a Nordic region special report published recently. 10 Indeed, the Nordic countries rank highly in economic competitiveness, social health, technological innovation and happiness. 11 For all these reasons, the Nordics have become a model for many economies. NORDICS LEAD THE CHARTS The framework conditions for innovation are multiple and involve a number of intangible factors capturing a wider notion of innovation that focuses less on innovation inputs and more on the way companies compete and whether the overall business environment supports innovation-based growth strategies. As a result, a number of global and regional innovation indices have been developed over time. Below we review the performance of the Nordic region in the most recent available rankings. 1. European Innovation Scoreboard 12 The Nordic countries score highly in the European Innovation Scoreboard, an index based on 25 indicators related to different dimensions of innovation. 13 The report presents a comparative analysis of the innovation performance of European countries, the US and Japan. Compared to the EU-28 average, the Nordic region s relative strengths are in innovation drivers, knowledge creation and entrepreneurship. Sweden, Denmark and Finland ranked above all other EU member countries in 2016 as the innovation leaders. Within the OECD, only Switzerland moves into this top group. FIGURE 5. Innovation performance: EU Member States 0,8 0,7 0,6 0,5 MODEST INNOVATORS MODERATE INNOVATORS STRONG INNOVATORS INNOVATION LEADERS 0,4 0,3 0,2 0,1 0 RO BG LV LT SK HU ES EL PT IT CZ MT EE CY SI EU28 FR AT LU UK BE IE NL DE FI DK SE RO: Romania, BG: Bulgaria, LV: Latvia, LT: Lithuania, SK: Slovakia, HU: Hungary, ES: Spain, EL: Greece, PT: Portugal, IT: Italy, CZ: Czech Republic, MT: Malta, EE: Estonia, CY: Cyprus, NO : Norway, SI: Slovenia, EU28, FR: France, AT: Austria, LU: Luxembourg, UK: United Kingdom, BE: Belgium, IE: Ireland, NL: Netherlands, DE: Germany, FI: Finland, DK: Denmark, SE: Sweden. Source: European Innovation Scoreboard 2016. 2. Global Innovation Index 14 The Global Innovation Index covers measures of innovation input (i.e. stable political climate, high-quality education and a strong human resource base) as well as measures of the actual innovation output (i.e. newly published research and registered patents). In 2016, Sweden took second place out of 130 countries. Finland was fifth; Denmark eight, and Norway twenty-second. The Index is co-authored by Cornell University, INSEAD and the World Intellectual Property Organization (WIPO).

The Nordic cluster: leading in innovation and growth - 9 3. Knowledge Economy Index 15 The Knowledge Economy Index ranks 146 countries globally based on their preparedness to compete in the knowledge economy 16 and to promote entrepreneurship. The index is based on the average of four sub-indices, representing the four pillars of the knowledge economy: Economic incentive and institutional regime (EIR) Innovation and technological adoption Education and training Information and Communications Technologies (ICT) infrastructure Sweden retained its first-place position as the world s most advanced knowledge economy in the latest ranking published in 2012 with particular strengths in the innovation and ICT pillars. Finland ranked second, with Denmark and Norway following closely in third and fifth place, respectively. The Nordic region s repeated success is driven by a large focus on education and training to skill its workforce... 4. Global Creativity Index 17 The Global Creativity Index is a broad-based measure of sustainable economic growth based on the 3Ts of economic development talent (educational attainment and the creative class), technology (R&D investment, researchers, and patents per capita) and tolerance (treatment of immigrants, racial and ethnic minorities). It ranks 139 countries worldwide on each of these dimensions. In the 2015 ranking, Denmark and Finland tied for fifth position while Sweden was in seventh place and Norway, eleventh. Nordic countries have a strong track record when it comes to digital technology and talent management with very progressive stands on tolerance and equality, especially Sweden, which came top in the 2004, 2011 and 2014 rankings. 5. World Economic Forum's Global Competitiveness Index 18 Innovation is an important driver of growth and competiveness. Since the mid-1990s, Nordic countries have been among the world s most competitive nations. In 2016, Nordic countries ranked among the top fifteen most competitive nations globally (Sweden #6, Finland #10, Norway #11, and Denmark #12) in the Global Competitive Index, which covers 138 countries and measures competitiveness defined as the set of institutions, policies and factors that determine the level of productivity. According to the World Economic Forum, the Nordic region s repeated success is driven by a large focus on education and training to skill its workforce, as well as an excellent enterprise environment with healthy competition in the national markets, well developed clusters, and financing that is more readily available than in many other parts of Europe. In addition, Nordic countries have adopted the latest digital technologies to enhance productivity and innovation. 6. Contributors to and detractors from global innovation 19 Relative to their size, Nordic countries invest more in science and human capital and have stronger innovation-incentivising tax policies than the OECD average, which results in positive spill-overs to the global innovation ecosystem. According to a recent study 20 by the Information Technology and Innovation Foundation (ITIF), ranking 56 countries on 27 different metrics, the countries with the largest positive contribution to global innovation on a per capita basis are Finland, Sweden and the UK. Denmark and Norway rank sixth and thirteenth, respectively. In contrast, India, Indonesia, and Argentina are the largest detractors.

10 - The Nordic cluster: leading in innovation and growth WHY ARE NORDIC COUNTRIES SO INNOVATIVE? Why has this remote region with its freezing winters and a combined population of only 27 million people proved to be so innovative? The reasons for this include a historical tradition of inventors and dependency on exports, a commitment to gender equality, the mass adoption of technology and a strong belief in the individual. LONG HISTORY OF OPEN EXPORT ECONOMIES Nordic companies have tended to be outward looking because their home markets are small. As a result, export-driven companies, such as car maker Volvo and shipping giant Maersk, have been dominant players. Nordic firms have been pioneers in developing new markets. Ericsson, founded in 1876, started selling phones to China as early as the 1890s 21 and has been a well-known brand name for decades. Forced to specialise and compete in world markets, Nordic companies have been successful at selling their products and services overseas. As a result, Nordic enterprises register sizeable exports, are present as investors in many countries and are effective in selling their knowledge abroad. In addition, Nordic economies have been able to attract foreign capital by offering strong capabilities at moderate prices. 22 FIGURE 6. Export as percentage of GDP, 1981-2016 NORWAY SWEDEN FINLAND DENMARK JAPAN UNITED STATES UNITED KINGDOM 60 50 40 30 20 10 1980 1990 2000 2007 2008 2009 2010 2011 2012 2013 2014 2015 0 Finnish exports are primarily wood, paper and telecommunication equipment. Processed food, pharmaceuticals and chemical products are the major Danish export products while cars, wood, paper and telecommunication equipment are predominant Swedish exports. Norway exports oil & gas, hydropower, fish and forestry Source: World Bank. Denmark is the world's leading manufacturer of insulin (Novo Nordisk), hearing aids (William Demant), toys (Lego), beer (Carlsberg) and wind power (Vestas). Sweden has world-class industrial companies (Sandvik and Atlas Copco) and retail stars (IKEA and H&M). Alvar Aalto and Arne Jacobsen are leading Nordic design brands with global recognition. Nokia s mobile phones and Kone s elevators are two examples of products globally exported by the Finns. Norway, drawing on its vast natural resources, is a global leader in sub-sea technology and salmon farming. Having invented the world s first reverse vending machine in 1972, Norwegian company Tomra is a global leader in sorting technology for recycling.

The Nordic cluster: leading in innovation and growth - 11 ENDOWMENTS AND CONTEXT The Nordic region benefits from abundant natural resources with Nordic countries ranking high on per capita natural resource exports. 23 Resource capital is concentrated in key industries: oil and gas (Norway), forestry and mining (Sweden and Finland). The institutional context is another clear strength of the Nordic countries. In terms of institutional quality, Nordic countries rank among the top 10 countries globally according to the Global Competitiveness Report. 24 Institutions are ranked on a number of factors such as voice and accountability, lack of corruption and the rule of law. In addition, the stability of the macroeconomic environment and sound public finances (balanced budget and low debt) provide good framework conditions for innovation in the Nordic markets. TECHNOLOGY LEADERSHIP Nordics have a history of disruptive innovations 25 and setting new international standards. As a global company, Skype is still less than 15 years old, but it facilitates more international calls than any other telecommunications operator on the planet. Skype's software allows anyone with an internet connection to make free voice calls from Skype to Skype and cheap calls from Skype to any traditional telephone line. Additionally, the software integrates other communication features such as instant messaging and file exchange. Founded in 2003 by Niklas Zennström and Janus Friis, Skype has shaken up the global telecommunications market. 26 Skype became Stockholm s flrst unicorn when it was bought by ebay for USD 2.6 billion in 2005 and has since been followed by Spotify, Candy Crush parent King, Minecraft maker Mojang and the payments service, Klarna. Music on demand was made available by Spotify, an online music service that allows users to stream millions of song tracks on demand to their computer or mobile phone. Founded in 2006 by Daniel Ek and Martin Lorentzon, the company is now global and has recently been launched in the US market. More recently, Sweden and Finland have seen the rise of online game software developers such as Rovio, the creator of Angry Birds, King with its famous Candy Crush saga, Supercell, known for its Clash of Clans, and Mojang, the creator of the popular video game, Minecraft. The success of the Nordic start-ups in this segment is impressive, with the key Nordic players changing the face of online gaming. In addition to these well-known names, there are a large number of smaller companies which are recognised within their industries and play an important role within niche businesses that require the ability to innovate. ENTREPRENEURIAL ENVIRONMENT Many aspects of Nordic culture contribute to create a favourable environment for entrepreneurship. A tradition of openness and transparency has allowed Nordic companies to integrate easily with other economies and cultures. In addition, Nordic countries possess a strong human resource base and dynamic workforce. During the 1990s, Nordic governments invested heavily in their technology infrastructure, nurturing a generation of people who grew up on the Internet and creating a culture of open access and entrepreneurial collaboration. It is no accident that the free file-sharing websites The Pirate Bay, Kazaa and utorrent were founded in Sweden. The latter two were started by the young entrepreneurs Niklas Zennström and Daniel Ek respectively, who would later go on to build Skype and Spotify. Innovation is closely linked to research and development. Sweden and Finland are two of Europe s top spenders in this area, having invested 3.2% of GDP in R&D in 2015. Compared to the EU-wide target of 3% of GDP investment by 2020, Nordic countries are clearly leading the way. 27 Private-sector R&D and innovation are supported by well-funded national innovation agencies, such as Finland s Tekes, Sweden s VINNOVA, Innovation Norway and the Danish Innovation Foundation. These organisations play important roles in enhancing the innovation capacity of Nordic companies. 28

12 - The Nordic cluster: leading in innovation and growth NORDIC INNOVATION IS THREEFOLD: Society Technology Business The Nordic region s high level of innovation activities is not just happening within business and technology, but also plays a key role from a societal point of view. SOCIETY - Spill-over beneflts from innovation to economic development The combination of a strong state and extreme individualism forms the basis for high levels of social trust. Nordic countries top global ratings when it comes to low levels of corruption, high levels of trust and government effectiveness. Trust means that government decisions are widely accepted and citizens tend to play by the rules. THE NORDIC BALANCE: HIGH SOCIAL TRUST, HIGH TAXES, HIGH SOCIAL SERVICE LEVELS A survey of social trust (as opposed to trust in immediate family) showed the Nordic countries in leading positions in terms of both general trust and institutional trust. The high levels of trust pay off in many ways. Economic studies show that high trust result in lower transaction costs. Participation in local elections is high and citizens are willing to pay high taxes. FIGURE 7. High levels of trust Trust in EU institutions Latvia Romania FINLAND Malta Luxemburg Netherlands DENMARK SWEDEN Bulgaria Poland Hungary Lithuania Slovenia Slovakia Belgium Croatia Czech Republic Estonia Austria Germany Spain Portugal Ireland Greece Italy France EU 28 Trust in National institutions Cyprus United Kingdom Source: European Commission: Mobilise Europe report, 2015. Note: The value of trust on the horizontal axis is the average value of the trust in local/ regional bodies, the national parliament, the government and the political parties. The value on the vertical axis consists of the average of trust in Parliament, the Commission and the European Central Bank. Origin is not a zero value but the average values of the EU s 28 member countries.

The Nordic cluster: leading in innovation and growth - 13 EFFECTIVE GOVERNMENTS AND LOW LEVELS OF CORRUPTION Public administration in the Nordic countries is efficient and fast. According to a recent study ranking the quality of governments from the University of Gothemburg 29, Denmark, Finland and Sweden have the most effective governments in the European Union. The quality of government is measured by indicators such as the level of corruption and rule of law (e.g. behaviour of the police force), bureaucratic effectiveness (e.g. public education and public healthcare) and government accountability (e.g. fair elections and role of media). FIGURE 8. Effective governments - global ranking Score of government effectiveness with 100 being best #1 Singapore #2 Switzerland #3 Hong Kong #5 Norway #6 Denmark #8 Finland #9 Sweden #10 Japan 100 99,52 99,04 98,08 97,60 96,63 96,15 95,67 #13 Germany 94,23 #22 United States 89,90 0 10 20 30 40 50 60 70 80 90 100 Source: World Bank (2016): Government effectiveness. Denmark is the least corrupted country in the world according to the 2016 edition of Transparency International s Corruption Perceptions Index. 30 The index covers perceptions of public sector corruption in 168 countries on a scale from 0 (highly corrupt) to 100 (very clean). Denmark scored 90, Finland 89, Sweden 88, and Norway 85 in the 2016 rankings. Nordic countries share key characteristics: high levels of press freedom, access to budget information, high levels of integrity among people in power, and judiciaries that are truly independent from other parts of government.

14 - The Nordic cluster: leading in innovation and growth The combination of extremely low corruption rates and the high quality of government institutions make the Nordic tax collection systems some of the most efficient in the world. Figure 9. Among the least corrupt countries in the world (0-100 with 100 being the least corrupt) Denmark New Zealand Finland Sweden Switzerland Norway Singapore Netherlands Canada Germany Luxembourg UK USA Japan Russia 29 74 72 90 90 89 88 86 85 84 83 82 81 81 81 0 20 40 60 80 100 Source: Transparency International (2016): Corruption Perception Index. A WORLD CLASS TAX SYSTEM The combination of extremely low corruption rates and the high quality of government institutions make the Nordic tax collection systems some of the most efficient in the world. Tax is deducted at the source, meaning that employers withhold tax and pay it on behalf of their employees every month. This ensures that employers, banks, insurance companies and pension funds are obliged to provide the tax administrations with relevant income data. The reporting works automatically and is digitalised, which makes it very reliable. The effective tax system ensures a steady flow of funds for public services and makes tax evasion very difficult. For this reason, tax collectors from Denmark and Sweden were called upon by the EU to help design and implement an effective tax collection system in Greece following the large economic stimulus packages in 2012. 31 FIGURE 10. Easy to pay corporate taxes Time spent on reporting taxes (hours) Norway Finland Sweden Denmark USA Germany India World China 83 93 122 130 175 218 241 251 259 0 50 100 150 200 250 300 Source: World Bank (2016): Doing Business Report. Note: Time to prepare and pay taxes is the time, in hours per year, it takes to prepare, file and pay three major types of taxes: corporate income tax, value added or sales tax, and labour taxes, including payroll taxes and social security contributions. EDUCATION AND SCIENCE Education and training have been a key priority for Nordic countries with high levels of government spending. According to a study by ITIF 32 ranking 56 countries globally, Denmark, Sweden, and Norway have the highest education spending and government funding of university research.

The Nordic cluster: leading in innovation and growth - 15 TABLE 1 TABLE 2 TABLE 3 Countries' Average Education Expenditures per student (PPP Dollars) Government funding of university research (per capita, PPP Dollars) Countries' Number of Researchers per 1,000 Population COUNTRY EXPENDING ($) COUNTRY FUNDING ($) COUNTRY RESEARCHERS PER 1000 1 Norway 18,218 3 Denmark 341 1 Finland 7.41 4 Denmark 14,638 4 Sweden 304 3 Denmark 6.73 5 Sweden 13,935 5 Norway 279 7 Norway 5.43 8 Finland 12,245 8 Finland 227 9 Sweden 5.09 13 USA 10,467 19 USA 130 17 USA 3.93 14 UK 10,437 26 UK 99 19 UK 3.92 17 Japan 8,585 28 Japan 90 8 Japan 5.17 Source: ITIF(2016): Contributors and Detractors: Ranking Countries Impact on Global Innovation. Another key strength of Nordic countries lies in their well-developed science and technology infrastructure, as measured by the availability of scientists, the quality of research institutions, university-business collaboration and the patent stock. A good example of strong links between industry and academic institutions is the Swedish higher education system, with links to companies like Ericsson, AstraZeneca, power firm ABB, Volvo and the Saab Group. The highly skilled and educated Nordic workforce has been a driving force behind the innovation process. Significant educational reforms have been made, both to promote competitive schools and to bring industry and universities closer together in conducting research. Finland consolidated three of its institutes of higher learning into a single institution, Aalto University, combining business, technology and design. Likewise, Denmark merged eight universities into four. These reforms are producing a workforce with better skills, as reflected by the OECD PISA international ranking of 15-year-old students 33 in which Finland ranked fourth in reading, fifth in science and twelfth in math, out of 72 countries. A unique feature of the Finnish system is the stringent selection of teachers, who are given autonomy to teach, design their own curricula and develop their own tests. Finland s students had been so successful in the OECD PISA ranking over the past decade that other countries began looking to Finland as an example of how to run an effective education system. Finland also ranks first on scientific research spending per capita. Furthermore, Finland and Sweden are trying to make their universities greater engines of national innovation by allocating a share of R&D funding to universities based on performance. For example, in Sweden, 10% of research funds allocated by the government to universities is distributed using performance indicators. Half of these funds are allocated based on the amount of external funding the institutions have been able to attract while the other half is based on the quality of scientific articles published (according to measures such as the number of citations). HIGH-RANKING UNIVERSITIES AND VIBRANT CLUSTERS The Nordic countries register six universities among the global top 100 (Times Higher Education Rankings 2016-2017). The absolute number of leading institutions is in line with the region s overall economic size. From a European perspective, Sweden and Finland are obtaining very good results relative to their population size and GDP, with eleven and nine institutions respectively in the top 200 universities, outperforming other leading countries like UK, Germany and the Netherlands. Denmark is also a strong performer with seven universities led by Aarhus University, which also appears in the World University Rankings 2016-2017 top 100. 34 Kingarion / Shutterstock.com Aalto University School of Business - Helsinki, Finland

16 - The Nordic cluster: leading in innovation and growth FIGURE 11. Top 15 universities in the Nordic region 1 KAROLINSKA INSTITUTE - SWEDEN 9 KTH Royal Institute of Technology - SWEDEN 2 University of Helsinki - FINLAND 10 University of Gothenburg - SWEDEN 3 Uppsala University - SWEDEN 11 Technical University of Denmark - DENMARK 4 Lund University - SWEDEN 12 Aalborg University - DENMARK 5 Aarhus University - DENMARK 13 Aalto University - FINLAND 6 University of Copenhagen - DENMARK 14 University of Bergen - NORWAY 7 University of Oslo - NORWAY 15 University of Oulu - FINLAND 8 Stockholm University - SWEDEN Source: Times Higher Education Rankings 2017. Notes: Here are the best 15 Nordic universities featured in the top 200 European universities. The first 12 of these universities are actually present in the top 100, confirming the high-quality education and research. Nordic universities have an open access and active collaboration policy allowing young innovative companies to benefit from world-class research infrastructures and large talent pools. As a result, several clusters have emerged alongside Nordic universities. Denmark alone has over 50 clusters in the fields of clean tech, food, and biotech. For instance, Medicon Valley is a leading life science cluster spanning the island of Zealand in Eastern Denmark and the Skåne region of Southern Sweden with over 100 small and medium-sized companies within the healthcare/biotech segment. The University of Lund, Sweden, is a strong engine behind the Medicon cluster, providing open access and strong collaboration networks. Overall, the high educational levels have led to an aggregate readiness to adopt new technologies and working methods, which in turn have been supportive of innovation. EQUALITY AND SOCIAL WELL-BEING Nordic countries have the highest degree of income equality in the OECD, measured by the Gini coefficient. 35 Income equality provides the basis for social mobility. Research shows that social background is less likely to determine the path in life in the Nordic countries than in the United States or the United Kingdom. FIGURE 12. Income Equality GINI coefficient in selected OECD countries, 0=total equality; 1=total inequality 0.36 0.39 0.25 0.25 0.26 0.28 0.29 0.29 The Royal Institute Of Technology - Stockholm, Sweden Norway Denmark Finland Sweden Germany France UK USA Source: OECD (2014): Gini Coefficient.

The Nordic cluster: leading in innovation and growth - 17 WORLD HAPPINESS REPORT According to the United Nations World Happiness Report, inequality is highly correlated with unhappiness, a relevant finding for rich countries like the United States, where rising income disparities have resulted in political discontent. The World Happiness Index ranks 155 countries on a number of factors including people's health and access to medical care, family relations, job security and other social factors such as political freedom and degree of government corruption. Norway ranks the happiest country followed closely by Denmark (second), Finland (fifth) and Sweden (tenth). The US ranked fourteenth. 36 The least happy countries are those destabilised by war, conflict or disease such as Syria, Yemen and Burundi. HUMAN DEVELOPMENT INDEX A look at the UN Human Development Index (HDI) 37 indicates that a high level of prosperity translates into a high standard of living. Norway and Denmark top the latest HDI ranking with the first and fifth position respectively. The rankings are based on three pillars: life expectancy, education and income/standard of living. All Nordic countries have improved their HDI score over the last five years. According to the United Nations: The HDI was created to emphasise that people and their capabilities should be the ultimate criteria for assessing the development of a country, not economic growth alone." Nordic countries are often referred to as examples of how to combine gender equality with high levels of labour force participation and fertility and of how to build a sustainable pension system. SOCIAL PROGRESS INDEX According to the Social Progress Index 38, Denmark is the most socially progressive country in the world and all Nordic countries are within the top 10. The Index does not include GDP but instead focuses on social wellbeing and environmental indicators. The total score is an average from three sub-indices: basic human needs, foundations of wellbeing, and opportunity. The purpose of the index is to create a framework for governments, business and civil society to benchmark and accelerate progress. FIGURE 13. Social progress index results 2017 1 DENMARK 7 NETHERLANDS... 2 FINLAND 8 SWEDEN 67 RUSSIA 3 NORWAY 9 AUSTRALIA... 4 ICELAND 10 NEW ZEALAND 83 CHINA 5 SWITZERLAND... 128 CENTRAL AFRICAN REPUBLIC 6 CANADA 18 UNITED STATES Source: Social Progress Imperative, 2017. GENDER EQUALITY The Nordic region has become a global role model for gender equality. Finland, Norway and Sweden occupy the second, third, and fourth leading positions of the Global Gender Gap Index. 39 Iceland takes the top spot for the eighth consecutive year, closing more than 87% of its overall gender gap. The index measures performance in four dimensions: economic participation and opportunity, political empowerment, educational attainment, and health and survival. The Nordic countries score highest in the economic participation and political empowerment categories in which the gender gap is typically the widest. Economic opportunity is measured by different indicators of gender wage equality and gender ratios in higher managerial positions. In this category, Sweden and Norway rank among the global top ten. 40

18 - The Nordic cluster: leading in innovation and growth Looking at both new and more established companies, the Nordic market becomes very exciting with a large number of potential tech growth companies. We have at least 4 000 reasons to be excited about. As a result, Nordic countries are often referred as examples of how to combine gender equality with high levels of labour force participation and fertility and of how to build a sustainable pension system. 41 The reproduction rate in the Nordic countries is among the highest in Europe with 1.9 babies per woman being the Nordic average compared to the EU average of 1.6 babies. 42 Universal day care for children makes it possible for both parents to work full-time while free education adds to the human capital potential. As a result, Nordic companies benefit from the skills and capabilities of all groups in society. FIGURE 14. Nordic female employment Employment rate of women, % of female population (15-64), 2016 OECD Iceland Switzerland Sweden Norway Denmark Germany New Zealand Netherlands Canada United Kingdom Japan United States France OECD Total 77 75 72.5 71.5 71.5 71.3 70.5 70 69 66.6 64.3 61 58.5 84 Source: OECD 2016. TECHNOLOGY - Innovation as a core enabler Technology has been a key driver of innovation and growth in the Nordic countries, which have a long history of setting international standards through disruptive technologies. Sweden introduced the mobile network in the 1980s and the GSM standard in the 1990s. Today, Nordic countries are leading the transition to e-government and the cashless economy. The mobile BankID 43, for example, has become a common form of identification. Everything from taxi rides to cups of coffee can be easily paid for with a credit card. Nordic citizens can pay their taxes by SMS. Innovative mobile payment service Swish enables private individuals to quickly and securely send money to other users in real time by connecting mobile phone numbers to bank accounts. It is ideal for splitting a check at a restaurant, paying at a flea market or sending gifts to relatives. To use this service, users just need a smartphone, the safety BankID, and the Swish application. According to the 2015 Boston Consulting Group e-intensity index 44, Denmark is the leading global internet economy. Multinationals often test new products on Nordic markets as Nordic consumers are highly sophisticated and more willing to try new things. 45 Technology firms are an important part of the Nordic economy. In particular, software and mobile technologies are growing significantly as technology transforms the healthcare, education and finance sectors. As a result, Nordic countries are extremely well-positioned to benefit from this megatrend. Standout Capital 46, a private equity investor focusing on opportunities in the digital transformation of business and society, said: Looking at both new and more established companies, the Nordic market becomes very exciting with a large number of potential tech growth companies We have at least 4 000 reasons to be excited about.

The Nordic cluster: leading in innovation and growth - 19 HIGH LEVELS OF R&D SPENDING Finland, Sweden and Denmark are among the nations with highest spending in R&D as a percentage of GDP. They also have more scientific publications and patents per capita than most OECD countries and rank among the top ICT economies in the world. 47 The majority of R&D investment in the Nordic countries is undertaken by large privatesector firms and higher education institutions. Although large companies dominate R&D in manufacturing industries, smaller companies make a larger contribution in the services sector. FIGURE 15. Indicators of innovation activity US DENMARK FINLAND SWEDEN NORWAY Government expenditure on R&D, of %GDP (2015) 2.8% 3% 2.9% 3.3% 1.9% Researchers per 1000 employed (2015) 9.1 15 15 14.3 11.2 Triadic patents per million of population (2014) 46.5 64.9 44.6 67.8 24.4 Internet access % of all household (2014) 78% 94% 92% 94% 98% Population (millions) 326 5.7 5.5 9.9 6 Source: OECD 2016. *For an international comparison, triadic patents, i.e. patents filed for the same invention in the US, EU and Japan, are a more suitable measure. By this indicator, US innovation activity lags behind that of Sweden, Denmark and Finland. Norway is a special case due to its large natural resources. When it comes to the business sector, Sweden and Finland are the countries with the highest corporate R&D investment intensity according to the European Innovation Scoreboard. 48 The average R&D intensity in the business sector for the EU is 0.5 while Sweden and Finland rank above 0.8. FIGURE 16. R&D Expenditure in business sector as percentage of GDP The R&D expenditure in business sector indicator captures the creation of new knowledge within firms. It is particularly important in the science-based sectors (pharmaceuticals, chemicals and some areas of electronics), where most new knowledge is created in or near R&D laboratories. 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 CY RO RS LV EL LT SK HR UA PL TR MT BG PT EE ES LU IT NO HU IS UK IE NL CZ EU FR BE SI DK DE CH AT SE FI CY: Cyprus RO: Romania RS: Serbia LV: Latvia EL: Greece LT: Lithuania SK: Slovakia HR: Croatia UA: Ukraine PL: Poland TR: Turkey MT: Malta BG: Bulgaria PT: Portugal EE: Estonia ES: Spain LU: Luxembourg IT: Italy NO: Norway HU: Hungary IS: Iceland UK: United Kingdom IE: Ireland NL: Netherlands CZ: Czech Republic EU: EU FR: France BE: Belgium SI: Slovenia DK: Denmark DE: Germany CH: Switzerland AT: Austria SE: Sweden FI: Finland Source: European Innovation Scoreboard 2016. R&D expenditure in the higher education system (HERD) is higher in all Nordic countries than in the OECD and the EU-28 average. In 2015, Denmark recorded the highest spending (with almost 1% of GDP), closely followed by Sweden (0.9%), Finland (0.7%) and Norway (0.5%).

20 - The Nordic cluster: leading in innovation and growth FIGURE 17. Higher education expenditure for R&D (HERD) as a percentage of GDP Nordic countries are ahead of the OECD and EU-28 averages in the number of patents per capita. 2005 2015 Denmark 0.59 0.99 Sweden 0.74 0.88 Finland 0.63 0.71 Norway 0.46 0.59 UK 0.4 0.44 US 0.36 0.37 Japan 0.44 0.43 China 0.13 0.15 EU 28 0.38 0.45 Total OECD 0.38 0.43 Source: OECD 2016. PATENT APPLICATIONS AND SCIENTIFIC OUTPUT The Nordic countries have on average relatively high patenting rates. In terms of the number of patents per capita, Nordic countries are ahead of the OECD and the EU-28 average. Sweden and Finland rank as the countries with the most patent applications with eight or more application per PPP billion euros of GDP. For the EU on average 3.7 Patent Cooperation Treaty (PCT) patents per PPP billion euros of GDP have been applied for. 49 FIGURE 18. Number of PCT patent applications per billion GDP (in PPP ) One indicator of the rate of new product innovation is the number of patents. This indicator measures the number of PCT patent applications. 10 9 8 7 6 5 4 3 2 1 0 RO LV SK EL PL HR BG PT CY LT CZ HU EE MT ES LU IT IE SI IS UK BE EU FR AT NL DK DE FI SE RO: Romania, LV: Latvia, SK: Slovakia, EL: Greece, PL: Poland, HR: Croatia, BG: Bulgaria, PT: Portugal, CY: Cyprus, LT: Lithuania, CZ: Czech Republic, HU: Hungary, EE: Estonia, MT: Malta, ES: Spain, LU: Luxembourg, IT: Italy, IE: Ireland, SI: Slovenia, IS: Iceland, UK: United Kingdom, BE: Belgium, EU: EU, FR: France, AT: Austria, NL: Netherlands DK: Denmark, DE: Germany, FI: Finland, SE: Sweden. Source: European Innovation Scoreboard 2016.

The Nordic cluster: leading in innovation and growth - 21 In scientific publications, the Nordic countries are strong relative to their population size and average given their number of scientists. Given that they are from non-anglophone countries, Nordic students have a high level of English language skills which is an advantage when it comes to publishing research papers. In citations, the Nordic countries are among the global leaders behind only Switzerland and the United States. FINTECHS ARE THE FASTEST GROWING BRANCH OF START-UPS IN THE NORDICS Financial Technology, better known as FinTech, is an area where Nordics are excelling and attracting significant investment. A recent Europe-wide FinTech study by the Stockholm School of Economics 50 showed that Stockholm is the third largest FinTech hub in Europe after the UK and Germany. Financial technology companies are generally start-ups founded with the purpose of disrupting incumbent financial systems. The Nordic financial market leads the world when it comes to technology applications and the way customers access financial products and services. 51 The success of Sweden s FinTech crown jewels Klarna 52, a payments start-up which allows users to buy without the use of cards, and izettle 53, a mobile company for small businesses, have led the rise of FinTech in the Nordic region with new businesses emerging from online lending to handling cryptocurrencies. The FinTech scene in the Nordics is a good mixture of driven technical entrepreneurs and an early adopter approach from the financial sector. ENVIRONMENTAL INNOVATION Energy innovation is a very important economic activity in the Nordic countries assuming approximately 6% of total revenues and employment in the region while the export of energy technology accounts for approximately 9% of total industrial exports. In addition, the Nordic countries have a strong position worldwide in energy innovation thanks to strong national support for this sector. For example, Nordics account for more than 30% of the word's market in the production of wind energy technology. The Nordic region ranks highly on environmental quality as measured by the Yale Environmental Performance Index. 54 Finland, Sweden and Denmark are ranked first, third and fourth, with Iceland taking second place. Norway ranks seventeenth globally. The index differentiates indicators by their impact on human health (i.e. environment-related diseases) and the natural system (i.e. climate change). Nordic countries rank among the global top ten in both categories. Nordic countries give a high priority to renewable energy, and are among the leading nations when it comes to exporting clean technology. On average, the Nordic countries generate electricity from renewable sources at four times the level of the OECD countries. Denmark has the highest number of green patent applications in health technology and climate change within the EU, with a strong focus on sustainable growth (alternative energy) and responding to ageing populations (nanotechnology). 55 BUSINESS - Strong culture of innovation The Nordics are known to have a disruptive business culture as exemplified by worldfamous Skype and Spotify. These companies are game-changers that spring up and revolutionise a particular industry. Skype has effectively replaced expensive calling cards by offering the chance to call family, friends and business colleagues for free while also offering the opportunity to use a video functionality to see to whom you are speaking in real-time. Today it has over 100 million users worldwide. In the case of music, Spotify has reinvented the music industry by replacing pay-as-you-go downloads with a monthly subscription for unlimited listening. Today it is the biggest streaming service in the world with more than 100 million monthly active users and 50 million paying subscribers. 56

22 - The Nordic cluster: leading in innovation and growth STRONG START-UP ECOSYSTEM The Nordics have a higher share of billion-dollar exits in comparison to GDP than any other region in the world, according to Creandum's latest Nordic Tech Exit Report (2016). Since 2005, the Nordics have represented 7% of global billion-dollar tech exits. While the Nordics are home to just 3% of Europe's population, they have received 16% of tech venture capital and produced 50% of Europe s billion-dollar exits during the same period. 57 Role models like Martin Lorentzon 58 are now inspiring a new generation of entrepreneurs and encouraging more private angels and venture capital from abroad. At the same time, existing entrepreneurs tend to reinvest in new start-up firms and share their know-how. The business environment plays a key role in the innovation process. The Nordic countries stable governments and strong regulatory frameworks provide solid bases for companies to expand abroad. Social benefits reduce the risks faced by entrepreneurs and the costs for companies. Research institutes and technical universities are well endowed and private companies have been able to benefit from publicly funded research and to utilise a steady flow of graduates in technical and scientific domains. As a result, Nordic countries rank highly in framework conditions for entrepreneurship and are catching up with the best performing countries, the USA, the UK and Canada. 59 There are high levels of job creation and destruction as successful start-ups expand while others fail. At the same time, a large share of the working age population is employed, which gives a more balanced human capital base even if the hours worked per capita are fewer than in other countries, such as the US and the UK. Success is defined beyond material gains in the Nordic business culture. This provides a strong sense of purpose, which has proven to be a positive for innovation. There are a number of examples of Nordic start-ups driven by a desire to positively impact society such as FundedByMe, a crowdfunding platform connecting entrepreneurs with potential investors and lenders. The platform is open to peer-to-peer investments, angel investors and venture capitalists. So far, FundedByMe has helped to attract over USD 1 billion for 255 projects worldwide. 60 Nordic companies generally bottom-up, flat and non-bureaucratic management style has also proven to increase creativity and new product development. 61 CONDITIONS FOR DOING BUSINESS Nordic countries rank positively when it comes to the ease of doing business, i.e. the regulatory processes involved in setting up and operating a business and the effectiveness with which the government applies them. Rules are measured by the World Bank s Doing Business Index 62 while the effectiveness is measured by the World Bank s Governance indicators. Compared to many other countries, business regulation in the Nordics is appropriately designed and the effectiveness of government authorities is high. On business regulation, Denmark comes out best, ranked third, while the other Nordic countries rank in the top ten. On government effectiveness, Norway ranks fifth, Denmark sixth, Finland eighth, and Sweden ninth. 63 On both dimensions, the positions of the Nordic countries have been stable over time. In the Nordic countries, there is generally less risk in starting a company because basic services such as education and healthcare are covered by the welfare system. In addition, companies themselves do not need to offer such services to their employees on the same scale that, for example, US firm have to. In addition, successful entrepreneurs are rewarded by tax rates on capital gains that are lower than the rate on wages, which helps companies expand.

The Nordic cluster: leading in innovation and growth - 23 ACCESS TO CAPITAL Access to capital for private companies and entrepreneurs is a key element in the innovation process. The Global Competitiveness Report includes data on financial market quality and on access to risk capital, a source of financing which is important for entrepreneurship. The Nordic countries rank positively on both dimensions. They are among the global top ten countries in terms of overall capital market quality. Access to loans is seen as especially good by the Nordic business managers who were surveyed by the World Economic Forum. Nordic rankings on financial market sophistication and equity market access are generally lower but still within or close to the global top 20. In venture capital accessibility, the Nordic countries also rank relatively high. 64 ECONOMIC FREEDOM The Index of Economic Freedom 65 measures the degree to which the policies and institutions of a country are supportive of economic freedom. It focuses on five broad categories: size of government, legal structure and security of property rights, access to sound money, freedom to trade internationally, and regulation of credit, labour and business. Nordic countries rank high on venture capital accessibility and are among the global top ten countries in overall capital market quality. Nordic countries top the rankings in a number of pillars such as property rights, freedom from corruption, business and labour freedom. A number of studies have found that countries with institutions and policies more consistent with economic freedom have higher investment rates, more rapid economic growth and higher income levels. This is consistent with the results in the Nordic region. FIGURE 19. Index of Economic Freedom 2017 summary of results World Average Europe Average Nordic Average Denmark Finland Norway Sweden World Rank 91 53 22 18 24 25 19 Region Rank 21 23 12 9 13 14 10 2017 Score 62 72 81 87 82 75 81 Property Rights 52 70 88 87 91 87 89 Business Freedom 65 75 91 94 90 90 91 Labor Freedom 59 60 60 86 53 49 53 Monetary Freedom 76 81 83 85 85 76 85 Trade Freedom 76 85 87 87 87 88 87 Investment Freedom 57 74 84 90 85 75 85 Financial Freedom 48 62 75 80 80 60 80 Source: The Index of Economic Freedom 2017. Ranking of 186 countries.

24 - The Nordic cluster: leading in innovation and growth The dynamism of the Nordic system strengthens the competitiveness of Nordic companies. ECONOMIC INCENTIVES Nordic countries have worked hard to make their tax environments more globally competitive. 66 For example, Sweden s corporate tax rate, which was 60% in 1982, was reduced to 28% in 1999 and now stands at 22%. 67 Finland s corporate tax rate stands at a competitive 20% while Denmark s is 22%, and Norway 24%. 68 In addition, Nordic countries have also introduced more attractive incentives for enterprises to invest in R&D and capital equipment. For instance, Denmark offers the fifth most generous R&D tax credit regime in the world and has introduced a collaborative tax credit a 150% taxable income deduction for all companies collaborating with a university or research institute. 69 Despite the competitive corporate tax levels, the taxes on earned income in the Nordics are among the highest in the world. Nordic citizens are willing to pay high taxes in exchange for social support services such as free education from kindergarten to university, national healthcare, generous unemployment benefits and free care for the elderly. Furthermore, unemployment insurance and retraining schemes result in a high labour turnover rate, which helps Nordic companies to be more flexible in their recruitment process. The dynamism of the Nordic system strengthens the competitiveness of Nordic companies. FIGURE 20. Total tax revenue as percentage of GDP Denmark 46.6 Finland Sweden 44.0 43.3 Norway Germany 36.9 38.1 OECD - Average United Kingdom 32.5 34.3 United States 26.4 Source: OECD (2015): Total tax revenue as percentage of GDP. High taxes and the low return on saving investments combined with a culture of high trust have been supportive of entrepreneurship. Stock options have become a common practice for Nordic start-ups, not only for the founders but also for regular employees. As a result, employees can gain big rewards from exits. Many of them will afterwards start their own companies or re-invest their capital as angel investors contributing to the wider economic system. In addition, private investors in start-ups are eligible for attractive tax deductions. The local government also offers various safety nets to provide entrepreneurs with income protection, which reduces even further the risks of launching a new company.

Nordic countries give high priority to renewable energy, and are among the leading nations when it comes to exporting clean technology The Nordic cluster: leading in innovation and growth - 25

NORDIC INNOVATION IN PRACTICE Company examples AUTOLIV - A global leader in automotive safety COMPANY NAME AUTOLIV INDUSTRY Automotive safety FOUNDED 1953 HEADQUARTERS Stockholm, Sweden PRODUCTS Seatbelts, airbags, steering wheels, safety electronics, active safety products REVENUE (mn ) 9 110 (FY 2016) EBIT (mn ) 800 (FY 2016) MARKET CAP(mn ) 8 773 (Q2 2017) NUMBER OF EMPLOYEES WEBSITE 61 663 (Q1 2017) www.autoliv.com Founded more than six decades ago 70, Sweden's Autoliv is the leading provider of automotive safety products (mainly seatbelts and airbags), with a 39% global market share. 71 An industry pioneer with a strong heritage, Autoliv sold its first seatbelt in 1956 and invented the first side-impact airbag for Volvo in 1994. The three-point seatbelt is estimated to have saved a life every six minutes since its launch. It is acknowledged as one of the most important car safety innovations of all time. 72 Today, Autoliv is the world s largest automotive safety supplier and a Fortune 500 company. 73 It supplies airbags, seatbelts, steering wheels, passive safety electronics and active safety systems such as radar, night vision, and camera vision systems. Autoliv also produces pedestrian protection systems. With 70 000 employees and operations in 27 countries, its customers include every major automobile manufacturer (GM, Ford, Volvo, Volkswagen and Toyota, among others). The company s name symbolises its vision of saving lives ( Liv is Lives in Swedish). Its innovative products save 30 000 lives every year and prevent 10 times as many injuries. FIGURE 21. Industry pioneer with strong heritage More than 60 years of innovation in automotive safety MECHANICAL PYROTECHNICAL ELECTRONICS DIGITAL 1950s 1980s 1990s 2000s 2010s

The Nordic cluster: leading in innovation and growth - 27 Autoliv is an example of a company using R&D to generate strong organic growth. As a percentage of sales, R&D spending was close to 7% in 2016, a relatively high figure in relation to its industry and competitors. The company employs 7 900 people in Research, Development and Application Engineering (R,D&E). In addition, it provides funding for a number of scientists at universities and independent research institutes to work on special projects. 74 Innovation is a top priority, which has been rewarded by investors with a 117% gain during the past five years, outperforming the S&P500, which returned 78% over the same period. 75 One of its most recent innovations is the bag-in-belt, a combination device with a small airbag running the length of the seatbelt shoulder strap. The airbag provides extra protection in an accident by tripling the surface area of the shoulder strap and better distributing crash force. Bag-in-belt had its debut in Mercedes- Benz S-class cars in 2013. It is expected that this new technology will eventually be fitted in lowerpriced cars. For Volvo, Autoliv developed exterior, hoodmounted airbags designed to cushion the blow to pedestrians or cyclists that are accidentally struck by the vehicle. Other innovations include anti-whiplash systems, knee-level airbags and integrated child seats. Autoliv is enjoying especially strong organic growth in active automotive safety, a small but growing segment, focusing on accident prevention technologies. 76 Among the segment's products are automatic forward collision warning and braking, lane departure warning, night vision and pedestrian detection. The company has also developed an "active seatbelt" that tightens automatically if sensors within the vehicle show an accident is imminent. 77 Revenue growth from emerging markets is expected to grow given that the demand for automotive safety features in developing countries is booming. Opportunities in North America and Europe are also growing as safety standards there increasingly require active safety features for a five-star crash rating. 78 This trend is expected to spill over to emerging markets in the coming years. The company s strategic focus is on quality and real life safety, and this is directly linked to a commitment to innovation and the aim of changing the industry landscape. In line with this, we believe Autoliv has the potential to continue its long-term sales growth. AUTOLIV S THREE-POINT SEATBELT

28 - The Nordic cluster: leading in innovation and growth TOMRA SYSTEMS - Leading the resource revolution COMPANY NAME INDUSTRY Recycling FOUNDED 1972 HEADQUARTERS Asker, Norway PRODUCTS TOMRA SYSTEMS Reverse vending machines, compactors and sensor-based sorting equipment REVENUE (mn ) 711 (FY 2016) EBIT (mn ) 108 (FY 2016) MARKET CAP (mn ) 1 600 (Q2 2017) NUMBER OF EMPLOYEES 3 500 (Q1 2017) WEBSITE www.tomra.no TOMRA is the world leader in reverse vending machines 79 for the recycling of beverage containers. The company has offered innovative solutions since 1972, when it introduced the first reverse vending machine. During four decades of constant innovation, TOMRA has developed into a leading global provider of sensor-based sorting solutions active in more than 50 markets. TOMRA has revenues of USD 711 million 80, employs 3 500 people and is publicly listed on the Oslo Stock Exchange. The global population is constantly growing 81 while at the same time the world is facing resource constraints. As a result, resource productivity needs to increase to maintain global sustainable development. TOMRA s business model contributes to this challenge by providing sensor-based solutions for optimal resource productivity in the recycling, mining and food industries. An example of resource productivity is its metal recycling machines that recover 715 000 tonnes of metal every year. In 2015, TOMRA received the European Business of the Year Award, in recognition of its innovation capacity and financial success. FIGURE 22. TOMRA creates sensor-based solutions for optimal resource productivity Every year TOMRA facilitates the collection of close to 35 billion empty drinking cans and bottles Every year TOMRA processes 15 million tons of potatoes with a 1% yield improvement over other alternatives

The Nordic cluster: leading in innovation and growth - 29 INVENTION In a small shed in Asker, Norway, the brothers Petter and Tore Planke created a solution to a problem: a local grocer wanted a machine that could quickly and easily take back empty bottles. Under Norwegian law, supermarkets are required to refund customers for empty bottles, but in the early 1970s they had problems managing large quantities of returned bottles. After meeting with several supermarket owners, the brothers developed a reverse vending machine prototype with a single hole to return all types of bottles and a printer for receipts of the refund due. The technology involved was an automated recognition system that could differentiate types of bottles. By the end of 1972, TOMRA had installed 29 machines throughout Norway and was on its way to an international launch. FIGURE 23. A TOMRA reverse vending machine Source: Tomra Tore Planke filed its first patent with the Norwegian Patent Office in 1971. Since then, TOMRA has filed patent applications for inventions related to over 40 of its technologies. These cover devices for lifting and rotating empty bottles and image recognition technology to identify different sorts of containers. Beyond Norway, the company has over 50 patent applications with the European Patent Office (EPO) and has filed over 30 international patent applications under the Patent Cooperation Treaty (PCT). CREATING VALUE THROUGH TWO STRONG BUSINESS AREAS TOMRA operates in two main business areas: collection solutions (reverse vending systems and materials recovery) and sorting solutions (sensor-based sorting solutions for optimal resource productivity in recycling, mining and food). defotoberg / Shutterstock FIGURE 24. TOMRA s two business areas TOMRA COLLECTION SOLUTIONS TOMRA SORTING SOLUTIONS REVERSE VENDING MATERIAL RECOVERY FOOD RECYCLING MINING Share of 2015 sales ~45% ~15% ~25% ~12% ~3% Employees 1310 500 580 175 60 Customers Grocery retailers Market share ~75% Grocery retailers and beverage manufacturers ~60% in USA (markets served) Food growers, packers and processors Material recovery facilities, scrap dealers, metal shredder operators Mining companies ~25% ~55-65% ~40-60% Source: Tomra, FY 2016

30 - The Nordic cluster: leading in innovation and growth TOMRA is well positioned to continue to lead the resource revolution in the years to come. Sorting solutions is the largest growing segment, offering economic and environmental benefits to the food processing, mining and recycling industries. Food sorting is the largest segment. The market is driven by increased food safety and quality requirements and the consumption of more packaged foods. In 2016, new product launches in the potato and nut segments resulted in significant growth. TOMRA s sorting machines use near infra-red spectroscopy to analyse the molecular structure of food products and x-rays, fluorescent lighting and lasers to measure the elemental composition to determine good or bad produce. 82 Increasing labour costs in emerging markets drive an increasing demand for sorting technologies to handle waste. Legislative frameworks are also strong drivers when it comes to recycling solutions. According to the Waste Electrical and Electronic Equipment (WEEE) Directive, the EU should aim to recycle at least 85% of electronics waste equipment by 2016. In addition, the Landfill Directives targets the amount of biodegradable municipal waste to be reduced to 35% in 2016. 83 In line with this, TOMRA is well positioned to respond to an increasing demand for more and higher quality food products and requirements for a less carbon-intense society. LONG-TERM COMMITMENT TO RESEARCH & DEVELOPMENT TOMRA pioneered the reverse vending industry and continues to lead innovation by investing up to 8% of its yearly revenue in R&D. 84 Investments focus on its core expertise: material recognition and processing, systems software and industrial design. R&D activities are closely connected to the local markets in order to maintain a technological advantage. For instance, TOMRA developed a patented container recognition technology called Sure Return, which has a video surveillance system to monitor objects inserted into the machine. The technology delivers immediate object registration, shape recognition and an antifraud system to prevent the user from cheating by pulling the object out and reinserting it again to get multiple refunds. Design plays an important role in the company s product development process. TOMRA has made significant investments in design-related R&D to create products that are adapted for use in specific environments and that have good aesthetics. Currently, TOMRA has seven industrial design registrations with the Trademarks Registration Office of the European Union (OHIM). RECYCLING FOR THE FUTURE Starting with an innovative solution to a specific need, TOMRA has developed products that go beyond making profits. They give something back to the consumer and this gives an incentive for people to recycle. The positive effect of TOMRA on the environment is clear and we believe their business will continue to grow as more people recycle. With its solutions for optimal resource productivity, TOMRA is well positioned to continue to lead the resource revolution in the years to come.

The Nordic cluster: leading in innovation and growth - 31 INNOVATION IN NORDIC HEALTHCARE The Nordic healthcare model is recognised to be one of the most innovative in the world, with significant investments in developing new treatments and drugs to diagnose and cure diseases. Pharmaceuticals are a key export and Nordic medical innovations include a number of the world s bestselling drugs such as the asthma medicine, Bricanyl, the growth hormone, Genotropin, and the stomach ulcer drug, Losec. Denmark s Novo Nordisk is the world largest producer of insulin with more than 90 years of innovation. It is a world leader in diabetes care. According to the World Health Organisation s estimate, the global diabetes rate among adults is 9% and constantly growing. 85 Research is not limited to the leading multinationals such as Novo Nordisk, AstraZeneca and Pfizer-Pharmacia. There are many small biotech companies conducting their own research. A key area of growth is medical devices (imaging equipment, orthopaedic implants, dialysis equipment and heart-lung machines). Below we provide two company examples in this segment, from Sweden (Elekta) and Denmark (Ambu). Denmark s Novo Nordisk is the world's largest producer of insulin with more than 90 years of innovation in diabetes care. ELEKTA - Leading the future of radiation therapy Elekta is a good example of a truly innovative firm in the Swedish mid-cap investment universe, which has pioneered significant innovations in radiotherapy technology for treating cancer and brain disorders. Elekta was founded in 1972 by the late Lars Leksell, Professor of Neurosurgery at the Karolinska Institute in Stockholm, Sweden. Today, Elekta solutions in oncology and neurosurgery are used by over 6 000 customers worldwide and the company employs around 3 500 employees in 28 countries. The long-term growth in the use of radiation therapy is driven by the increasing number of cancer cases. In addition, demand is also driven by a shortage of capacity, the need for cost efficiency and the potential for improved treatment possibilities. The market is currently growing by approximately 3% to 5% annually. This rate of growth is expected to continue in the medium term and subsequently increase to 6% 7%, driven by growth in the emerging markets. 86 FIGURE 25. Growth of cancer incidence People, million 30 25 20 15 10 5 0 14 8 Mortality Cancer incidence Mortality 2012A 2015E 2020E 2025E 2030E 2035E 24 15 COMPANY NAME INDUSTRY ELEKTA Oncology Neuroscience FOUNDED 1972 HEADQUARTERS Stockholm, Sweden PRODUCTS Products and systems for radiation therapy and surgery Leksell Gamma Knife, Elekta Neuromag, Oncology Software (Mosaiq), Treatment Planning Software, Brachytherapy REVENUE (mn ) 1 120 (FY 2016) EBIT (mn ) 190 (FY 2016) MARKET CAP (mn ) 3 286 (Q2 2017) NUMBER OF EMPLOYEES WEBSITE 3 500 (Q1 2017) www.elekta.com Source: The World Health Organization, 2014 forecast of new cancer excluding melanoma.

32 - The Nordic cluster: leading in innovation and growth The desire to make life easier for doctors and to flnd innovative products that can save lives. The company is well-positioned to grow from increased radiotherapy penetration in combination with demographic trends. The company recently launched a new product Atlantic (MRI guided radiation therapy), which provides high-quality images of tissue and tumours while treatment is in progress and enables the radiation dose to be adapted in real time. Elekta is one of the two providers of this technology and claims to have the best product offering available on the market. Two large German hospitals have submitted a tender for the product in 2016, which supports the positive sentiment on the company s long-term growth potential. The current market price for Atlantic is USD 8-10 million per unit with further potential orders through to 2019 totalling USD 700 million. AMBU A global leader in single-use medical devices Ambu, a Danish medical company, is another good example of Nordic innovation in the global healthcare sector. Founded in 1937, the company now operates globally, with 2 454 employees worldwide and factories in China, Malaysia and the US. For more than 75 years, Ambu has aimed at developing new and better products to improve the quality of patient care. COMPANY NAME INDUSTRY FOUNDED 1937 HEADQUARTERS PRODUCTS AMBU Healthcare Copenhagen, Denmark Laryngeal masks, ascope single use videoscope, BlueSensor Electrodes, Neuroline Electrodes REVENUE (mn ) 280 (FY 2011) EBIT (mn ) 48 (FY 2016) MARKET CAP (mn ) 2 941 (Q2 2017) NUMBER OF EMPLOYEES 2 454 (Q1 2017) WEBSITE www.ambu.com Ambu s philosophy has always been: The desire to make life easier for doctors and to find innovative products that can save lives. 87 Ambu develops and produces life-supporting devices for hospitals and rescue services focusing on anaesthesia, patient monitoring and emergency care. Growth is mainly driven by its innovative single-use medical technology products such as laryngeal masks and electrodes. An example of its strong future potential for growth is the recent launch of the ascope, the world s first single-use flexible video scope. The device has a portable plugand-play system which is easy to transport. It is instantly available and sterile straight from the pack with no further handling and reprocessing. The company claims that this improves patient safety and provides high quality at an affordable price. In recent years, Ambu has acquired companies and product technology to boost growth and increase scale. Today, Ambu s revenue is earned in USA (47%), Europe (42%) and Asia- Pacific & Latin America (11%). FIGURE 26. Ambu ascope 3 the single-use flexible video scope Source: Ambu

CONCLUSIONS The Nordic cluster is one of the most innovative regions in the world, not just from a technological perspective but also from a business and societal point of view. The strong economic performance of the Nordic countries is grounded in the overall productivity that companies have been able to achieve given the context in which they operate. The innovative capacity of companies has especially been a key driver of long-term growth. The evidence outlined in this white paper provides insights into the specific advantages of the Nordic economic system that are likely to support future innovative performance. The Nordic region tops international rankings on economic performance, innovation and standards of living. What the data reveals is that the success of the Nordic countries is the result of the strong competitiveness foundations built by governments and companies over time. Firstly, Nordic countries have favourable framework conditions - stable institutions, solid infrastructure and macroeconomic policies, high skills, knowledge intensity, openness and flexibility - which have become increasingly important in the global economy. Secondly, the ways the region capitalises upon its natural resources, technology leadership and disruptive innovations, income and gender equality, and good conditions for doing business are key advantages. Thirdly, competitiveness, especially in the areas of factor inputs, the science system and the strengths and sophistication of companies are key benefits. Nordic countries are among the nations spending the most on R&D as a percentage of GDP. In term of outputs, Nordic countries have more scientific publications and patents per capita than most OECD countries and rank among the top ICT economies in the world. Nordic innovation is taking place across a number of sectors from IT and industrials to healthcare and eco-innovation. In part three of this paper, we provided company examples within the medical devices, safety and consumer staples segments and sectors to illustrate how Nordic innovation works in practice. At Alfred Berg, we provide Nordic investment solutions across a wide range of asset classes and investment strategies. Our local investment teams on the ground in the Nordic local markets have a long tradition of fundamental bottom-up investing. To make the most of the theme of Nordic innovation and exploit the market inefficiencies that exist in the Nordic investment universe, we combine three knowledge centres (Stockholm, Oslo and Helsinki) to provide full Nordic coverage. We hope you have enjoyed the Nordic innovation journey and look forward to providing you with further insights into this topic.

ENDNOTES 1. World Bank s databank (2016): GDP per capita (current US$). 2. Prokopets, Elena, Nordic Tech: How Sweden Became The European Startup Central, Romexsoft, April 2016. 3. Norden (2016), State of the Nordic Region, Nordregio report 2016:1. 4. OECD (2016): How s Life? Measuring Well-being, OECD Publishing, Paris. 5. UK Government (Gov.UK) and European Parliament websites (2017). 6. Statista (2017): Employment rate in OECD countries. https://www.statista.com/statistics/268127/employment-rate-in-selected-industrialized-countries/ 7. Norden (2016): State of the Nordic Region, Nordregio report 2016:1. 8. Ministry of Foreign Affairs Denmark (2016): Flexicurity. http://denmark.dk/en 9. World Bank (2017): Ease of Doing Business Report 2017. http://www.doingbusiness.org/rankings 10. The Economist (2013): The Nordic Countries The Next Supermodel. 11. United Nations (2016): World Happiness Report Update 2016. http://worldhappiness.report/ 12. and 13. European Commission (2017): European Innovation Scoreboard 2016. http://ec.europa.eu/growth/industry/innovation 14. INSEAD, Cornell University and WIPO (2017): The Global Innovation Index 2015 edition. https://www.globalinnovationindex.org/ 15. World Bank (2012): The Knowledge Economy Index (KEI). http://www.worldbank.org/kam 16. Derek H. C. Chen and Carl J. Dahlman, The Knowledge Economy, the KAM Methodology and World Bank Operations, 2006. 17. Martin Prosperity Institute (2016): Global Creativity Index 2015 edition. http://martinprosperity.org/ 18. World Economic Forum (2016), Global Competitiveness Report 2016-2017. www.weforum.org/gcr. 19. Ezell, Stephen J., Nager, Adams B., and Atkinson, Robert D., Contributors and Detractors: Ranking Countries Impact on Global Innovation, ITIF, 2016. 20. Published in January 2016. 21. Ericsson (2017): The History of Ericsson. http://www.ericssonhistory.com/ 22. Ketels, Christian, Global pressure: Nordic Solutions?, The Nordic Globalization Barometer, Copenhagen 2008. 23. and 24. World Economic Forum (2017), Global Competitiveness Report 2016-2017. www.weforum.org/gcr. 25. Christensen, Clayton M., Raynor, Michael E., and McDonald, Rory, What is Disruptive Innovation?, Harvard Business Review, December 2015 Issue. 26. Osterwalder, Alexander, Ondrus, Jan, and Pigneur, Yves, Skype's Disruptive Potential in the Telecom Market: A Systematic Comparison of Business Models, University of Lausanne, 2005. 27. Nordic Innovation House (2015): R&D spending data. http://www.nordicinnovationhouse.com/ 28. Norden NordForsk (2016): Research Policy and Cooperation. https://www.nordforsk.org/en 29. University of Gothenburg, Sweden (2010): Measuring the Quality of Government and Subnational Variation. 30. Transparency International (2015): Corruption Perception Index 2015 edition. http://www.transparency.org/cpi2015 31. Kommunekredit, MuniFin, Kommuninvest, and Monday Morning (2012): The Nordic Model: Local Government, Global Competitiveness in Denmark, Finland and Sweden. 32. Ezell, Stephen J., Nager, Adams B., and Atkinson, Robert D., Contributors and Detractors: Ranking Countries Impact on Global Innovation, ITIF, 2016. 33. OECD (2016): Programme for International Student Assessment (PISA). PISA is a worldwide exam administered every three years that measures 15-year-olds in 72 countries. About 540,000 students took the exam in 2015. 34. Times Higher Education (2017): World University Ranking 2016-2017. https://www.timeshighereducation.com/ 35. OECD (2014): Income inequality Measuring the Gini Coefficient. https://data.oecd.org/inequality/income-inequality.htm 36. United Nations (2017): World Happiness Report 2016 edition. http://worldhappiness.report/ 37. United Nations (2017): Human Development Index 2016 edition. http://hdr.undp.org/sites/default/files/2016_human_development_report.pdf 38. Social Progress Imperative (2017): Social progress Index 2017 edition. http://www.socialprogressimperative.org/ 39. and 40. World Economic Forum (2017): Gender Gap Index 2016 edition. http://reports.weforum.org/global-gender-gap-report-2016/ 41. Hiilamo, Heikki, Kangas, Olli, Fritzell, Johan, Kvist, Jon and Palme, Joakim, A Recipe for Better Life: Experiences from the Nordic countries, CMI Finland, 2013. 42. Kommunekredit, MuniFin, Kommuninvest, and Monday Morning (2012): The Nordic Model: Local Government, Global Competitiveness in Denmark, Finland and Sweden. 43. BankID is an electronic identity comparable to passports, driver s licenses and other physical identity documents. It allows companies, banks, organisations and government agencies to authenticate and conclude agreements with individuals over the Internet. BankID is used both for identification as well as signing. According to Swedish law, and within the European Union, a signature made with a BankID is legally binding.

44. Boston Consulting Group (2016): E-intensity Index 2015 edition. http://www.ebusinessbook.nl/86 45. According to Booz & Company. 46. Standout Capital (2015): Over 4,000 Tech-enabled Growth Companies in the Nordics. 47. World Economic Forum (2017), Global Competitiveness Report 2016-2017. http://reports.weforum.org/global-competitiveness-report-2016-2017/ 48. European Innovation Scoreboard (2017): R&D Expenditure in Business Sector as % GDP. 49. European Innovation Scoreboard (2017): PCT Patent Applications per billion GDP (in PPP ). 50. Stockholm School of Economics (2015): An overview of the FinTech sector in the greater Stockholm Region. 51. PwC (2016): Fintech: Nordic Summary How FinTech is shaping Financial Services and Deloitte (2017): "FinTech in the Nordics". 52. www.klarna.com 53. www.izettle.com 54. Yale University (2016): Yale Environmental Performance Index 2016 edition. http://epi.yale.edu/reports/2016-report 55. Kristensen Iryna, Teras, Yukka, and Rispling, Linus. Innovation: Nordic leads the charts. Nordregio Report 2016. 56. The Telegraph (June 2016): Spotify crosses 100m users. 57. Blomquist, Daniel. Creandum Nordic Tech Exit Report 2016. 58. Founder of Spotify. 59. Swedish Entrepreneurship Forum (2015): The Entrepreneurial Code- A Comparative Study of Entrepreneurial Dynamics in China, Europe and the U.S.. www.entreprenorskapsforum.se 60. www.fundedbyme.com 61. Maliranta, Mika, Määttänen, Niku and Vihriälä, Vesa, Are the Nordic countries really less innovative than the US? VoxEU.org, 2012. 62. World Bank (2016): Ease of Doing Business Report 2016. http://www.doingbusiness.org/rankings 63. World Bank (2016): Worldwide Governance Indicators. http://info.worldbank.org/governance/wgi/index.aspx#home 64. World Economic Forum (2017), Global Competitiveness Report 2016-2017. http://reports.weforum.org/global-competitiveness-report-2016-2017/ 65. The Heritage Foundation and The Wall Street Journal (2017): Index of Economic Freedom 2017 edition. 66. OECD Tax Database: 2017 data. 67. KPMG: Online Corporate Tax Rates for 2006 2017. 68. In the US, the corporate tax rate is 40%. 69. Ezell, Stephen, Effective Innovation Policies and Institutions Continue to Help Drive Success of Nordic Economies, ITIF, October 2013. 70. By Swedish business man Lennart Lindblad in 1983. 71. and 72. Autoliv s Annual General Presentation (2017). 73. Autoliv Update presentation (June 2016): Navigating the Nordics. 74. Autoliv s Annual Report (2016): Saving More Lives. 75. Period: 31/12/2011 to 31/12/2016, expressed in USD dollars. 76. By contrast, passive safety features protect vehicle occupants once an accident occurs. 77. Nasdaq.com (May 2015): This Innovative Firm Is Rejecting Artificial Growth. 78. US Department of Transportation launched the 5-Star Safety Ratings Program to provide consumers with information about the crash protection and rollover safety of new vehicles beyond what is required by Federal law. One star is the lowest rating; five stars are the highest. 79. Reverse vending systems provide an automated method for collecting, sorting and handling the return of used beverage containers for recycling. 80. Blomberg: FY 2016. 81. United Nations (2016): The World Population Prospects: 2015 Revision. Global population is estimated to grow to 9 billion by 2050.https://esa.un.org/unpd/wpp/ 82. Dr. Harnisch Publications on Food Marketing and Technology (August 2015): Sorting the Good from the Bad: A Smart Innovation in Food Safety. 83. TOMRA s Investors Presentation (28 April 2017). 84. TOMRA s Annual Report 2016. 85. The World Health Organization. 86. www.elekta.com 87. www.ambu.co.uk

36 - The Nordic cluster: leading in innovation and growth This material is issued and has been prepared by Alfred Berg Kapitalförvaltning AB (Alfred Berg)*, a member of BNP Paribas Asset Management (BNPP AM)**. This material is produced for information purposes only and does not constitute: 1. an offer to buy nor a solicitation to sell, nor shall it form the basis of or be relied upon in connection with any contract or commitment whatsoever or 2. any investment advice. Opinions included in this material constitute the judgment of Alfred Berg at the time specified and may be subject to change without notice. Alfred Berg is not obliged to update or alter the information or opinions contained within this material. Investors should consult their own legal and tax advisors in respect of legal, accounting, domicile and tax advice prior to investing in the Financial Instrument(s) in order to make an independent determination of the suitability and consequences of an investment therein, if permitted. Please note that different types of investments, if contained within this material, involve varying degrees of risk and there can be no assurance that any specific investment may either be suitable, appropriate or profitable for a client or prospective client s investment portfolio. Given the economic and market risks, there can be no assurance that the Financial Instrument(s) will achieve its/their investment objectives. Returns may be affected by, amongst other things, investment strategies or objectives of the Financial Instrument(s) and material market and economic conditions, including interest rates, market terms and general market conditions. The different strategies applied to the Financial Instruments may have a significant effect on the results portrayed in this material. Past performance is not a guide to future performance and the value of the investments in Financial Instrument(s) may go down as well as up. Investors may not get back the amount they originally invested. The performance data, as applicable, reflected in this material, do not take into account the commissions, costs incurred on the issue and redemption and taxes. * Alfred Berg Kapitalförvaltning AB is an investment manager authorised by Finansinspektionen in Sweden, company number 556472-1149, a limited company with its registered office at Nybrokajen 5, 111 48 Stockholm. www.alfredberg.se ** BNP Pariabas Asset Management is the global brand name of the BNP Paribas group s asset management services. The individual asset management entities within BNP Paribas Asset Management if specified herein, are specified for information only and do not necessarily carry on business in your jurisdiction. For further information, please contact your locally licensed Investment Partner. August 2017 - Design : AM STUDIO - P1707046 The asset manager for a changing world