Arctic Yearbook 2014 - Page 337

337 Arctic Yearbook 2014 where the design was made by Icelandic companies and the actual building was performed by Chinese labour. This case suggests a strong historic path-dependency, by centuries of human capital creation leading to a full-fledged knowledge-based economy based on natural resources in the 21st century. One of the main future challenges for Iceland will be to maintain a diversified portfolio of domestic educational and research programs, while at the same time maintaining a strong tradition of “brain circulation” with international top-universities. The Faroe Islands illustrate that a knowledge-based energy sector can be created even though no economically viable oil and gas resources are found and with a less extensive history of human capital building and “brain circulation”. Over the past 100 years the main steps have been taken to create the human capital base it has today. In recent years revenues from exploration activities have been used to support knowledge institutes and increase their capacity. In turn, these institutes supply the economic sectors with human capital that remains closely linked to these institutes via guest lectures and research opportunities. Technological innovations and the Internet have reduced the impact of remoteness and distance, particularly important for the Faroe Islands, and have thereby increased the opportunities for “brain circulation” with the rest of the world. The main challenge for the Faroe Islands in the future will therefore be to develop a new University campus in Tórshavn with the necessary facilities to attract more students and researchers to the country. Greenland stands at the beginning of creating a knowledge-based economy. Human capital is an important factor, and the Icelandic and Faroese examples show that even a small state can create sufficient human capital to support a knowledge-based economy. This is particularly important if it wants to localise the benefits from a future energy sector as much as possible. The example of the Faroe Islands is most promising to Greenland, since it illustrates that it is not mandatory to have a century-long history in large scale human capital building and “brain circulation”. Breaking with an economy based on primarily natural resources can be achieved, provided that emphasis is placed on building strong knowledge institutes and creating a critical mass of human capital locally. Education and the creation of human capital are defined as one of the top priorities and receive a lot of attention in Greenland. Institutes such as the School of Minerals and Petroleum have been created to support knowledge development related to the oil and gas sector. “Brain circulation” and exchange of experience takes mainly place with Denmark, Norway and North America (USA and Canada). The main challenge for Greenland will be to establish a critical mass of skilled labour and to deal with the risk of foreign labour influx if oil and gas activities really take off. References Ármannsson, P.H. (2005). Orkuver og arkitektúr [Power plants and architecture]. In S. Pálsdóttir (eds), Fyrirtækið og umhverfi þess [Landsvirkjun 1965-2005: The company and its environment] (pp. 201242). Reykjavík: Hið íslenska bókmenntafélag. The Challenges & Opportunities for Microstates in Developing an Energy Sector