Current State of Entrepreneurship in Greenland: Key Statistics
In 2024, Greenland’s GDP is expected to hit USD 3.2 billion. This growth comes from steady inflation and more investment in key areas. Greenland has seen a big rise in new businesses. The number of startups has jumped by 15%. Tech and green energy are leading the way. This shows a strong entrepreneurial spirit and a growing economy.
Additionally, Greenland is focusing more on sustainability to grow its economy. Knowing the GDP of Greenland in 2024 shows how green efforts boost economic growth. Studies reveal a 15% drop in carbon emissions from major industries. Companies are using green models to improve:
- Renewable energy projects
- Eco-friendly manufacturing
- Circular economy practices
- New green technologies are being used in various fields
Furthermore, Greenlanders’ aspirations to diversify their economy and generate new opportunities for all will require a young and dynamic workforce prepared to start and build new businesses across various sectors. This initiative will support efforts to equip young people with the skills needed to fulfill Greenland’s economic potential.
At the request of and in partnership with the people of Greenland, USAID is working with Fonden for Entreprenørskab – Kalaallit Nunaanni branch of the Foundation for Entrepreneurship to foster the next generation of Greenlandic entrepreneurs. The initiative will train teachers and provide them with the tools to deliver entrepreneurship education at both the primary and secondary level.
According to recent data, while specific details on Greenland entrepreneurship statistics for 2023 are limited, the trend shows a growing interest in new businesses outside of the traditional fishing sector, particularly in tourism, hospitality, and locally sourced products. Some reports indicate an increase in new business ventures and the potential for further growth in these emerging sectors; however, the overall economy remains largely reliant on fisheries as the primary source of income.
The number of businesses registered has gone up by 8% each year. Also, 65% of startups succeed. In 2023, foreign tourism contributed revenue to Greenland of almost DKK 1.9 billion, with a gross added value of DKK 1.2 billion.
Moreover, efforts are being made to support new businesses through initiatives like the US-Greenland Enterprise Driven Growth Initiative (EDGI). However, comprehensive and readily available data on entrepreneurship statistics can be scarce, and entrepreneurial activity might differ significantly across different regions of Greenland.
Why is Fishing the Dominant Industry in Greenland?
The fishing industry in Greenland is very important to the national economy. It employs some 6,500 people out of a population of 56,452 (2010). Fishing exports account for about 90% of the country’s total exports. Major exports go to the United States, Japan, and various European nations. Additionally, the contribution of fishing industries to the economy is estimated to be over 50%. Its contribution to gross national income is reported to be as much as 20%.
Fishing is Greenland’s largest private industry, contributing between 23% and 30% to the economy. In 2000, the fishing industry’s contribution to gross national income was recorded at 25%. The fishing market is a vital source of livelihood for the sparsely populated coastal villages, which depend entirely on marine resources for subsistence. Specifically, exports of fish and fish products account for a significant percentage of total exports, with prawns contributing 54% of the fish export value.
The fisheries sector constitutes roughly 95 percent of Greenland’s total exports. For instance, the export value of fish products was valued at DKK 4.4 billion in 2021. More than 4,300 people are directly employed in the fishing industry or the fishing-related industry and trade.
Moreover, according to government statistics, fishing is Greenland’s most important industry, accounting for 93% of the country’s total exports. In 2019, Greenland exported a diverse range of fish and seafood. During this year, shrimps accounted for the highest export value, exceeding 2.5 billion.
Lastly, the fishing industry is centered in Disko Bay, and dominant catches include shrimp, cod, halibut, and salmon.
Challenges Faced by Entrepreneurs in Greenland
Entrepreneurs in Greenland face several significant challenges:
- Here in Nuuk, for example, there is a lack of locations for entrepreneurs. The local food lab closed because of lack of funds. This situation threatens otherwise viable businesses. Entrepreneurship must be taken seriously, with proper support systems in place.
- High interest rates pose another obstacle. Current rates reach 9%, which diverts funds that could otherwise contribute to business growth. While there are funds available for lower interest loans, the requirements are so stringent that almost none of the smaller businesses can qualify. Therefore, there is a crucial need for cheaper loans.
- Additionally, securing venture capital remains a challenge. Greenland startups struggle with maintaining financial stability and scaling quickly. They require strong support systems due to the remote location and lack of infrastructure. Moreover, limited access to financing, a scarce skilled workforce, and high operational costs significantly impact their success.
- Another challenge pertains to the retention of young Greenlanders. Many young individuals leave the country for education abroad and often choose not to return. This brain drain creates difficulties in sustaining the workforce necessary for various industries, ultimately affecting long-term business viability.
- Lastly, Greenland has a chronic trade deficit. The value of imports consistently exceeds exports, which is often financed by subsidies from Denmark. This highlights the economic vulnerability that entrepreneurs must navigate.
Diversification Strategies for Greenland’s Economy
The viability of new shipping routes and other maritime activities in Greenland will depend, among other things, on investments in comprehensive marine infrastructure. Greenland is strategically positioned to both benefit from and help manage such investments.
Melting land and sea ice is making Greenland’s rich mineral and hydrocarbon deposits more accessible. This is attracting the notice of countries competing for energy transition materials. However, developing these resources remains challenging due to Greenland’s harsh environment, remoteness, lack of infrastructure, high extraction costs, and local concerns about environmental impacts and risks to traditional livelihoods.
Greenland’s fisheries are crucial for its economy. They provide livelihoods for local communities, are Greenland’s main export commodity, and contribute significantly to the nation’s GDP. Moreover, Greenland is an important contributor to the global supply of fish. With climate change, its significance may actually increase.
Additionally, the commercial exploitation of Greenland’s ice and water could help meet the growing global demand for fresh water. Approximately twenty percent of the world’s fresh water is locked up in the ice sheet that covers the island.
Greenland-led private sector business development and trade connectivity will accelerate Greenland’s inclusive economic growth and increase livelihoods. Its economic value spans rare earth minerals, hydrocarbons, tourism, and research opportunities, making it a cornerstone of future growth. To support this, the green growth project for Greenland (EUR 22 million budget support) will also facilitate sustainable development and economic diversification.
Furthermore, the country’s economy would benefit from diversifying away from grants from Denmark and its reliance on fishing in the North Atlantic Ocean. A 2023 survey showed that 25 of 34 minerals deemed ‘critical raw materials’ by the European Commission were found in Greenland.
Government Support Initiatives for Entrepreneurs
The U.S.-Greenland Enterprise Driven Growth Initiative (EDGI) aims to support entrepreneurs in Greenland by streamlining commercial activity and improving trade connectivity between Greenland and the United States. This initiative is designed to facilitate cross-border business connections, enhance access to trade-related resources, and attract new investments in key growth sectors, especially tourism.
Moreover, EDGI is focused on advancing Greenland-led solutions for sustainable and inclusive businesses. It seeks to strengthen the capacity of local business support service providers to engage entrepreneurs in rural, predominantly indigenous communities. This approach aims to build networks that support a thriving entrepreneurial ecosystem in Greenland.
Notably, the initiative recognizes the unique challenges posed by Greenland’s Arctic geography. These challenges impact infrastructure development and economic diversification, which are essential for creating new livelihood opportunities and fostering private sector growth.
In addition, Greenland prioritizes significant investment and growth in its trade and tourism sectors. It is expanding and reinforcing international commercial ties to support the growing and diversifying economy. Under the U.S.-Greenland Enterprise Driven Growth Initiative (EDGI), Resonance is partnering with local stakeholders to support the advancement of Greenland-led private sector business development and trade. Since 2022, EDGI has worked with Greenlandic municipalities, firms, and entrepreneurs.
As part of its commitment to advancing business development, EDGI launched the Inclusive Business Incubator (IBI). This incubator aims to pilot and scale robust and inclusive business development services (BDS) in Greenland’s hardest-to-reach municipalities. Through the IBI, managed by Resonance’s local partner INUVA, Inaluk received crucial mentorship and resources customized to her experience as a woman business owner. This support helped her strengthen her business model and expand her network. With her mentor’s support and advice, she explored new markets by traveling to cities like Ilulissat and Sisimiut, actively networking and acquiring new clients.
Over the pilot stage, the IBI supported a total of 19 entrepreneurs across 17 small businesses based in the Qeqertalik and Kujalleq municipalities. Participants praised the quality of personalized mentorship support, reported gaining confidence and new skills, and appreciated networking opportunities with fellow business owners in their communities.
Additionally, EDGI is strengthening the capacity of local Greenlandic business support service providers to engage entrepreneurs in rural, predominantly indigenous communities and build networks to support a thriving Greenlandic entrepreneurial ecosystem. Greenland empowers local businesses through the EDGI program, enhancing digital marketing, tourism, and economic growth in challenging Arctic conditions.
Moreover, USAID is partnering with Greenland to increase opportunities for inclusive economic participation through Greenland-owned, enterprise-driven solutions. Informed by detailed assessments, USAID identified several key innovations.
For instance, Innovation South Greenland (ISG) introduces a new business development fund, Aallartisaatit, to make it easier for entrepreneurs in South Greenland to get started. Furthermore, Greenland’s government is promoting business growth and connectivity through initiatives like business accelerators, commercial partnerships, and collaborations with the tech industry.
Success Rates and Trends in Greenlandic Startups
Greenland’s startup ecosystem is booming, with a predicted 20% increase in tech jobs by 2025. Currently, there is a demand surge of 18% over three years. Notable startups like EcoGrid Energy and Arctic AI Solutions are leading innovation in renewable energy and AI. Moreover, Greenland’s tech industry contributes 8% to GDP, which is expected to reach 12% by 2027.
The data shows that successful startups are receiving more funding at older ages. For instance, 31% of Series A companies were 6-9 years old in 2023. Impressively, Greenland’s startups have managed to raise $95.7M in funding and created more than 500 jobs, which is significant for a small country.
Greenland is rapidly emerging as a tech hub. The tech sector contributes over 8% of GDP, projected to reach 12% by 2027. Key growth areas include renewable energy, maritime, and tourism tech. Startups like EnergyIce and Loki Foods are leading innovation, while government initiatives support economic diversification. Local ventures and initiatives are creating significant job opportunities, fostering a vibrant entrepreneurial ecosystem.
Greenland’s government is fully invested in supporting a thriving tech scene with serious initiatives. They have the U.S.-Greenland Enterprise Driven Growth Initiative (EDGI) aimed at accelerating business growth and connectivity between Greenland and the U.S. This program promotes commercial partnerships, funds a business accelerator to boost local startups (including the tourism sector), and assists municipalities in planning for sustained economic development.
Greenland’s tech scene is vibrant, featuring young entrepreneurs making waves. For example, teens from the Mind Your Own Business program are running their own micro-companies like 7ly High clothing, selling unique hoodies that represent Greenland. The program equips them with the skills to launch brands and sell products. Additionally, established companies like Greenland Technologies are leading the electric heavy equipment sector.
However, Greenland startups face real risks when seeking venture capital funding. Investors may hesitate if a startup lacks a solid product or market understanding. Additionally, there’s the risk of financial struggles if things don’t go as planned. Startups need venture capital to take off and scale quickly.
To date, Greenland startups have raised $135M across various funding rounds. Notably, there has been 1 acquisition and 2 IPOs in Greenland. The tech scene is booming with startups in AI, renewable energy, blockchain, and cybersecurity anticipated for 2024. Notable companies include Arctic Innovations and Nordic AI Solutions.
