The Arctic Economic Council (AEC) is an independent business organisation facilitating sustainable economic development in the Arctic. Today we have members from more than 30 companies and organisations that all have interests in the High North. Our members are both large multinational corporations and SMEs, as well as indigenous organisations like the Inuit Circumpolar Council, RAIPON, NANA Regional Corporation, and the Aleut International Association.
Currently the AEC has five working groups covering themes like maritime transportation, investment and infrastructure, responsible resource development, blue economy, and connectivity. While the connectivity working group focus on telecommunication, we at the AEC also works with connectivity in many different ways in our daily operations. In fact, our everyday work is based on connectivity, meaning building relationships with stakeholders, fostering business opportunities, and promoting investment opportunities.
Overall, we at the AEC does three things. Firstly, the AEC conducts policy advocacy to promote the best framework conditions for companies operating in the Arctic. This happens both with national governments and international organisations. Secondly, the AEC facilitates networking among its members, creating private-public partnerships. Thirdly, the AEC communicates the opportunities in the Arctic to the public. A part of this involves addressing the prevailing misconceptions surrounding the Arctic and shaping the image of the region as a provider of innovative technological solutions for the rest of the world.
The connection with the Arctic Council
The AEC founding meeting took place in Iqaluit, Nunavut, Canada in 2014 after the Arctic Council (AC) had recognised a missing link in communication with the business sector. Both the AEC and the AC have their main offices in Tromsø, Norway, allowing for close dialogue and coordination. Over the years a close neighbourliness has developed into a strategic partnership formalised under the Icelandic chairmanship, and culminating with the signing of the Memorandum of Understanding in Rovaniemi in 2019. Soon after, AEC and AC hosted the first joint meeting between the two councils where the Senior Arctic Officials, Permanent Participants, AEC members, and representatives from the working groups discussed common challenges.
Most recently, the two councils have been collaborating on the AC Task Force on Improved Connectivity. The AC have a coordinator to follow the work of the AEC Connectivity working group.
Investment matrix for connectivity projects
The pandemic has highlighted the digital divide that exits in large parts of the Arctic. In May this year, the AEC will share the final report on connectivity with the AC, which will be made available on our website. The work on the report is led by Dr. Pam Lloyd from the Alaskan telecommunications company, GCI. The report investigates the status of the telecommunications infrastructure and has developed an investment matrix that policymakers and investors can use as a tool to finance connectivity projects in the polar regions. The report can be read here.
Closing the infrastructure gap
There is an infrastructure gap in large parts of the Arctic. For this reason, many of AEC’s members are working to develop and upgrade the infrastructure. Two such companies are the Norwegian energy provider Troms Kraft, which invests in hydrogen projects, and Finnish Destia, which is among the industry leaders in the construction of roads and rails in the northernmost parts of Scandinavia and Canadian ATCO, providing integrated energy, housing, and infrastructure solutions in the most remote areas. The ocean is the highway of the Arctic, connecting most of the world’s economies. Here companies like Crowley Solutions, Rosatom, and Sovcomflot are operating in some of the toughest environments, delivering resources and exporting raw materials to the rest of the world.
The promising economic potential of the Arctic is often challenged by the fact that we are only four million people living across vast distances. Therefore, companies in the Arctic need to trade with the world, even when business operations are at times more expensive than elsewhere.
Closing the infrastructure gap will not only boost the quality of life of the local population, it will further increase the region’s accessibility for investors and new business ventures. The Arctic holds the resources that the rest of the world needs, with minerals providing key elements for the high-tech production of electric vehicles, wind turbines, and cell phones. The region is also an exporter of energy: both oil and gas – but also renewable energy – are supplied to the international market. In the coming decades, more people around the globe will enter the middle class and there will be an increase in demand for sustainable food sources. Already now, Arctic fisheries and aquaculture are supplying meals rich in protein to the world market. Simultaneously, the innovative approaches of local companies turn seafood waste into commercially valuable products with a wide range of potential applications. Market opportunities for other sustainable Arctic food products like reindeer meet are also growing.
Arctic Investment Protocol
Investments are needed in the Arctic, which is why the AEC is promoting the Arctic Investment Protocol (AIP) as a set of guidelines for investors aspiring towards sustainable operation in the region. The protocol was developed by the World Economic Forum in accordance with the UN Sustainable Development Goals. The document gives guidelines to potential and current investors, helping them to:
- Build resilient societies through economic development;
- Respect and include local communities and indigenous peoples;
- Pursue measures to protect the environment of the Arctic;
- Practise responsible and transparent business methods;
- Consult and integrate scientific and traditional ecological knowledge;
- Strengthen pan-Arctic collaboration and sharing of best practices.
The AEC promotes best practice in the region and will in the coming months develop a report with specific investment opportunities in the Arctic. We want to connect investors like Guggenheim Partners with exciting projects.
Connecting with strategies for the region
In recent years, we have seen an increased interest in the Arctic. Many countries have updated their strategies and the AEC is actively working on connecting with and reaching out to the wider political establishment. We want to make sure that national governments do not forget the important role of business and development in the region. Countries like Norway and Sweden have recently published their strategies; soon Finland and the Kingdom of Denmark will follow. Likewise, the European Union will publish their updated Arctic strategy in October this year.
It is crucial that these policy documents mirror the realities and aspirations of the people living and working in the region. The strategies need to reflect the need for investments in infrastructure and connectivity and, even more importantly, in the people that live in the Arctic.
Connecting with the world
It is important for the AEC to communicate with non-Arctic states, especially in order to avoid the misconception that the Arctic is an isolated small glass snowball or a protected national park with polar bears roaming around. The strategic location of the Arctic connects the world via maritime sailing routes, aviation services, and LEO-satellites. Some of the global megatrends like climate change, changing demographics, and increased digitalisation will affect everyone. Therefore, we need to promote the Arctic in a global context. The Arctic, for example, could be a key region for the newly established European Cluster of Raw Materials, where companies like LKAB or Ambler Metals could contribute with important expertise.
AEC welcomes new members
In May 2021, Russia is taking over the chairmanship of the AEC. The focus areas for the next two years will be on maritime shipping, digital infrastructures, and sustainable investments. The chairmanship has identified cross-border collaboration as one of their key priorities as well as the development of strategic partnership with the AC. We welcome new members from Arctic and non-Arctic states to join our platform and resources.
Title photo: Tromsø harbour by Stefán Erlingsson