Why Akureyri?

Why Akureyri?

As a Midwesterner, this is a great question. It turns out that while there are very good reasons to study Akureyri on its own, it is a great counterexample to developments in the American Midwest.

Akureyri was a fishing and trading village for many years, and in second half of the 20th century, it grew in manufacturing as well. At the turn of the 21st century we find that these industries do not support the thriving economy they once did. Just as elsewhere, globalization and economic concentration have concentrated and increased competition so that far fewer people are employed in these areas than previously.

The Midwest has seen similar changes. Farming has concentrated enormously, meaning that far fewer farmers are working than in the past, the margins are tighter, and the capital necessary to start up is greater. Towns that grew up supporting farming have stagnated in the face of these changes. The same is true of other industries near the Midwest, such as mining, logging, and fishing. Manufacturing too has concentrated, so that many Midwestern rust belt cities have decaying factories at their core. Cities that have not effectively managed these economic changes, are dying. Cities that are successful have grown their third sector industries. Des Moines, Minneapolis/St. Paul, Omaha, Chicago, and others are cities with a heavy third sector concentration. Education, Health Care, software, and insurance, are industries that have helped these Midwestern cities grow.

Akureyri is a good example of this. The second largest town in Iceland, it has become a regional center of the northeast side of the island. The town has pursued several avenues of growth in third sector economies. The University of Akureyri has grown from a handful of students to 1500 in only 15 years, with the last 500 happening in just a few years. The arts have grown, so that they have a small arts district, and a year round theatre. They have grown their ski resort, drawing skiers from all over Iceland. They also have grown international tourism. There is a focus on eco-tourism, as well as cultural tourism drawing in cruise ships with thousands of passengers into the town in the summer.

All this growth represents third sector economic growth, and brings needed cash into the community, as older sources have plateaued or diminished.

There are a few problems associated with this kind of development however. First is that while this growth does bring jobs into towns, it does not bring jobs for those who have been laid off from more traditional industries. Third sector growth is of course better than no growth, but the individual problems associated with being an unemployed blue-collar laborer don’t really change. Second, much of the third sector economy relies upon general economic prosperity and stability. Tourism is one of the hardest hit in times of economic slowdown, and all of it rests upon successful and efficient delivery of the extraction and manufacturing economies. They are still important – they are just too competitive for lots of families to make livings off them.


So, an excellent reason to study Akureyri is that we may learn more about this economic transition. This is a small enough town, in a small enough country, that we may be able to uncover some of the essential mechanisms of this transition. With a broad enough comparison, perhaps to Midwestern cities, we may be able to make generalizations about this transition.

Finally, this is an interesting transition in an interesting town all on its own. It is the regional center for the north of Iceland. While histories have been written, the process and effects of this transition has not been studied closely. As a small town in the arctic arena, its success is an interesting story.