The centre of Klaksvík. Photo source: https://www.klaksvik.fo/english. Photo: Petur Martin Solmunde V.9. KLAKSVÍK AND THE FAROE ISLANDS: Structural Transformations and Adaptation – Boosting attractiveness through engaged citizens and local companies based on a growth plan By Michael Kull and Karen Refsgaard, 2018/2019 Introduction Why are some municipalities better than others at We are an enterprising lot. deploying their resources, attracting people and We want to create a good creating jobs? This was the key question studied in place to live and seek this analysis of the attractiveness of 14 rural mu- opportunities, and we stand nicipalities in the Nordic Region. united to reach our goals The 14 areas selected are all defined as at- tractive in the sense that their populations and JÓGVAN SKORHEIM, MAYOR OF KLAKSVÍK the number of people in work have increased in re- cent years. The nature of the boost to employment in some sectors has been identified by means of tives and entrepreneurs, high school students and shift-share analyses to determine how much of the people from the education sector, as well as fami- change is attributable to specifically local factors. lies. Combined with analyses of other data and in- Interviews then probed key stakeholders about formation, the interviews helped us to understand motivation, working conditions, job creation and why some places do better than others. living conditions. These interviews were with public Among the reasons to choose Klaksvík for a sector representatives (e.g. mayors and heads of case study was the positive change in terms of planning and development), business representa- net migration and population, along with positive nordregio report 2020:1 138 32 economic trends of recent years. Klaksvík is lo- Norðoyggjar – Net migration patterns, cated on one of the northern Faroe Islands. It is 2007–2016 the major township in Norðoyar county. There are 100 approximately 12 others, plus some small villages. All together they have a total population of ap- 50 proximately 5,920. When the fishing industry emerged in the late 0 nineteenth and early twentieth centuries, Klaksvík –50 2007 2009 2010 2011 2012 2013 2014 2015 2016 comprised some rather scattered farming set- 2008 tlements. This changed dramatically (Klaksvíkar –100 Kommuna, 2017). Klaksvík became a municipality –150 in 1908 and from then until 1970 the population increased from 700 to 4,266. Population growth peaked in 1989, at 5,000. The economic crises that Norðoyggjar – Population change, 2007–2016 the Faroe Islands endured in the 1990s hit Klaksvík 6 000 hard. The municipality, like Norðoyggjar county as a whole, then saw its population fall (Figure V.9.2.). 5 950 During the economic recovery (and on account of a 5 900 growth plan with a range of socio-economic impli- 5 850 cations, plus the construction of a sub-sea tunnel 5 800 – more of which below), the demographic situa- 5 750 tion in both Klaksvík and the county as a whole im- 5 700 proved. Population figures became positive once more (Figure V.9.2.). 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Figure V.9.2. Norðoyggjar – Net migration and population, 2007–2016. For many years, there were fewer women than men in the municipality.33 The municipality’s financial situation also im- proved after 2009. While the tax level was higher that year than in 2017, the municipality has nearly doubled its overall income during this period. The years 2013 and 2014 saw the fastest growth, Mayor Skorheim34 explains. However, compared to Tórshavn, where the economy grew steadily, he 33 Looking at the situation in the Faroe Islands as a whole, the islands have had fewer women (approximately 2,000) for some time. During the Second World War, many young women married British soldiers. Since 1950, a large number of them have moved abroad to seek education, and many have started families abroad. From the 1960s and for the next two to three decades, there were numerous marriages between young Faroese women and Danish/NATO soldiers deployed on the islands during the Cold War. These factors may all have played a role in producing a Figure V.9.1. Map of the Faroe Islands. gender imbalance. Recent figures, however, show a greater Source: https://da.wikipedia.org/wiki/ proportion of women coming to the Faroese community. There are several policies in place to motivate students to return, F%C3%A6r%C3%B8ernes_regioner#/media/ which will be discussed below. This has also had an impact on File:Map-kommuna-2005new-color-caption.png. the overall balance. 34 Skorheim was born in Klaksvík. Prior to becoming mayor, he had his own company (soap and cleaning). He became deputy 32 For the different steps involved in data collection and case mayor aged 26, and mayor in 2013 at the age of 30. Skorheim is study selection, see the ’Methods’ section. also member of the Faroese parliament, the Løgtingið. nordregio report 2020:1 139 Nor∂oyggjar, 2008–2016 -200 -100 0 100 200 300 400 500 600 Agriculture Fishing Aquaculture Extraction of raw materials Fish processing Shipyards/machine shops Other manufacturing Construction Energy Trade and repair Hotels and restaurants Sea transport Other transport Communication Finance and insurance Business services Household services Public administration and services: Central ... Public administration and services: Municipalities etc. Public administration and services: Education Public administration and services: Health and social work Culture, organizations etc. Activities n.e.i. Jobs in 2016 Local Employment Effect Employment Change predicted on the basis of sectorial and national trends Figure V.9.3. Employment and local employment effects in Norðoyggjar. Theblue bar shows the number of jobs in the area in 2016. The grey bar shows the change in employment levels as predicted on the basis of sectoral and national trends. The red bar shows the local employment effect. Where it is positive, local development in that particular industry is better than would have been predicted on the basis of national and sector trends. This means either that industry in the area is stronger, or that specific policies are in place. Qualitative methods of data collection (e.g. interviews) help us to understand the factors underlying these figures. reminds us that that Klaksvík’s specific situation 2008 and 2016. In Norðoyggjar county there more is more fragile and that it is still dependent on the jobs remained than would have been expected on fishing industry. The second largest sector for em- the basis of national trends.35 Compared to the ployment in Norðoyggjar county and in 2016 – af- national trend, the expectation would have been ter public administration – is fisheries. But trade that by 2016 only around 350 jobs would be left in and repairs, fish processing and construction are fishing, while there were actually still around 400 also important (Figure V.9.3.). jobs in the sector (down from 441 jobs in 2018 – see The proportion of jobs provided in the fishing Table V.9.1. next page). sector (and in related fish processing) in Klaksvík, as part of Norðoyggjar county, is continuously high 35 This shift-share analysis for the period from 2008-2016 and the local employment effect is stronger than shows that public administration (health and social work) average for the Faroe Islands. Overall for the Far- especially, plus fishing, fish processing, household services and the shipyards have done better than expected, when compared oes, some 370 jobs were lost in fishing between with the national and sectoral trends. nordregio report 2020:1 140 Table V.9.1. Jobs in Norðoyggjar county 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Agriculture 3 3 2 3 2 2 3 7 8 9 Fishing 494 441 433 421 389 389 367 392 385 398 Aquaculture 89 98 120 131 136 153 160 174 200 171 Extraction of raw 6 8 8 7 6 4 4 4 4 4 materials Fish processing 263 208 85 205 203 205 202 222 214 219 Shipyards/machine 78 77 72 61 71 93 95 105 108 112 shops Other manufacturing 119 120 117 84 87 91 87 85 95 98 Construction 252 238 186 198 190 186 194 204 218 232 Energy 18 16 16 16 16 15 17 19 19 16 Trade and repair 350 377 328 295 293 304 318 311 335 325 Hotels and restau- 40 41 34 23 27 25 25 44 45 43 rants Sea transport 80 107 92 88 106 84 92 92 91 88 Other transport 68 70 57 43 43 67 58 69 64 69 Communication 40 39 49 48 42 29 25 25 19 23 Finance and 96 91 83 84 85 73 69 65 68 67 insurance Business services 66 59 54 54 41 36 41 45 42 46 Household services 23 27 37 38 42 39 42 40 48 47 Public administration 40 43 43 41 43 38 37 39 43 44 and services: Central administration Public administration 280 279 261 263 284 287 284 296 314 337 and services: Municipalities etc. Public administration 176 170 171 169 168 165 171 173 165 166 and services: Education Public administration 479 491 479 488 469 493 482 467 499 521 and services:Health & social work Culture, 41 42 39 37 32 33 37 36 39 38 organizations etc Activities n.e.i. 22 18 20 18 - 13 18 17 20 23 SUM 3123 3063 2786 2815 2775 2824 2828 2931 3043 3096 Bearing in mind the continuing importance of has been provided by the municipal growth plan the fisheries sector, this study aims to shed light published in 2010. Working with the local people in on the transformations that have taken place over Klaksvík, the municipality analysed the economic the past few years.