Industry and labour market

The insular community and limited population numbers mean that market economy price formation in most towns and settlements in virtually all vital areas is absent or extremely limited because there is only one or very few providers of a given product or service. At the same time, trade between settlements is modest because the size of the Greenlandic domestic market only allows home production within a few areas. Thus, only 14 % of the total freight is between settled locations in Greenland, while the remaining 86 % of cargo comes directly from a Danish or international supplier to the individual settlement. Similarly, internal air freight is very modest. In addition, the climate-related challenges that further complicates transport.

The insular community with small communities also means that there are tasks that are vital to society in a number of settlements where the customer base, however, is too small and makes it impossible for the local population to pay prices that correspond to the actual costs. Consequently, a number of services and utility tasks are carried out by the public sector or by government-owned companies, whereas the same services in countries with which Greenland is typically compared are often provided by private companies. This contributes to a large public sector.

Since 1979, Greenland has had a trade deficit, except for 1989.

Business structure and employment

In 2019, an average of 26,994 people who had an officially registered address in Greenland were in employment per month. There were 3,987 companies, roughly half of which are made up of sole proprietorships within fishing and hunting. The value of the total value creation in 2019 was DKK 32,405 million.

The four pillars of business

Historically – and currently – Greenland has been highly economically dependent on exports of fish and shellfish, accounting for 95 % of the total exports of goods. This makes Greenland extremely vulnerable to fluctuations in stock sizes as well as fluctuations in world market prices. Since the 1980s, the objective has therefore been to increase the business and revenue base by supporting business development in other areas. Greenland’s future economy is therefore based on what is known as ‘the four pillars’, which consist of fishing, sheep farming and hunting, mineral resources, tourism and landbased industries. Currently, mineral resources and tourism only make a modest contribution to the economy and employment.

The insular community structure means that the public sector is involved in all the pillars via government-owned limited companies and government-owned companies funded by a net appropriation. Furthermore a number of business grants, including subsidies to entrepreneurs, are provided. Public administration and services include employees in the municipalities and the Self-Government, including in the education, health and social services sector and the technical area.

Fishing, sheep farming and hunting

Fishing, fishing-related industry and trade are treated as one because the industry’s dominant players handle the entire chain – from fishing over processing to marketing and selling. For example, the government-owned Royal Greenland A/S, which is Greenland’s largest company, has both an sea-going and a coastal fishing fleet. Royal Greenland’s land-based production includes 37 facilities along the west coast of Greenland. The production units are based on local species with shrimp, Greenland halibut, cod, snow crabs and lumpsucker (roe) being the main species. In addition to its facilities in Greenland, Royal Greenland also owns factories in Canada and Germany, as well as sales offices in Canada, China, Japan and several European countries.

The industry’s largest privately owned player is Polar Seafood Greenland A/S, established in 1984 as a sales and marketing firm for a number of privately owned trawlers. Polar Seafood has a Greenland halibut factory in North Greenland where local fishermen sell their catch as well as a smokehouse and a shrimp packing plant in Esbjerg, facilities in Russia and a number of European countries. The subsidiary, Polar Raajat, has factories in Nuuk and Aasiaat, which together have the world’s largest production of peeled shrimp. Apart from inshore Greenland halibut, the raw products are primarily fished by the company’s own trawlers.

There are other private trawler shipping companies and a large group of cutter owners as well as a significant number of dinghy fishermen who also figure as self-employed and who contribute more than a third of the value of the inshore fishing industry. In the case of Greenland halibut, dinghy fishermen account for 60 % of the total sales value (2018).

Thus, the fishing industry and, to a lesser extent hunting and sheep farming, have a total of 1,895 self-employed persons. Consequently, almost half of Greenland’s companies are engaged in fishing and fish processing and accounted for 18 % of total value creation in 2019. In terms of employment and economy, this is the second largest sector after public administration and services, which do not include government-owned companies.

Greenland’s fishing territory stretches 200 nautical miles from land. The fishing industry is divided into off-shore fishing (sea-going) and inshore fishing (coastal fishing up to 3 nautical miles from the baseline). Just under 60 % of the total catch value is caught offshore (2018), while inshore fishing with smaller vessels contributes a little over 40 % of the total catch value and has the greatest importance in terms of employment.

The majority of exports consist of unprocessed or more lightly processed raw products. So, for example, unpeeled shrimps constitute about 60 % of the value of shrimp exports and correspondingly about 80 % of the value of Greenland halibut exports consist of whole frozen fish. When such a large proportion of exports is not processed before export, it is partly due to the fact that some of the demand is for unprocessed raw products and partly due to the lower wage and production costs in the countries where processing is carried out. This means that a significant part of the value added in the processing is realised outside of Greenland. Both the shrimp exports and the part of the Greenland halibut exports that originates from offshore fishing are MSC certified.

In 2019, approximately 4,400 people were employed in fishing, fishing-related industries and trade (including self-employed fishermen and hunters), meaning that this industry constituted 16 % of employment.

Most of the trawlers for offshore fishing are registered in the large towns such as Nuuk, Maniitsoq, Sisimiut, Aasiaat and Ilulissat. They sell some of their catch in these towns, while a not insignificant part of the catch is exported directly without first being traded in Greenland. For many years, it has been a challenge to recruit sufficient crew and especially ship’s officers for offshore fishing, partly because of the long voyages away from the family. Therefore, a not insignificant proportion of ship’s officers come from the Faroe Islands and, to a lesser extent, Iceland. The Greenlandic Manning Executive Order stipulates the how many of a trawler’s crew must be Greenlandic: In 2021, it is 100 % of the deck crew and 60 % of the ship’s officers.

The employment and socio-economic significance of onshore fishing varies and, in some districts, it plays a modest role due to limited fishing resources and/or insufficient sales options. The shrimp trade is concentrated in the towns of Nuuk, Sisimiut, Aasiaat and Ilulissat, while the Greenland halibut is very important to the employment in the towns and settlements of Ilulissat, Uummannaq and Upernavik districts.

In addition to fishing, this pillar also includes sheep farmers and hunters. In 2019, there were 39 sheep farmers in South Greenland with a total ewe stock of 17,374 animals. Four of these farmers keep cattle and by 2019 had a total cattle herd of approximately 300. There were two caribou breeders with a total herd of about 1,600 caribou. The bulk of the sheep, lambs and cattle are slaughtered in the Neqi A/S slaughterhouse in Narsaq, which also cuts and processes products for the Greenland domestic market.

In 2019, there were just under 1,900 active hunters with commercial hunting licences. The condition for holding a commercial hunting licence is that the bulk of the income comes from hunting and fishing. Depending on the hunting season and the season of the year, many hunters also engage in fishing, and for some, fishing is actually their main occupation. The hunters’ incomes vary greatly. About half earned less than DKK 150,000 per year in 2019, while one third earned more than DKK 200,000 and are thus at the same level of or above the collective wage for unskilled labour.

Extraction of mineral resources

Extraction of mineral resources in Greenland was a key focus area for the Danish State. During the colonial period and up to 1979, there were several mining projects, the most important ones being the cryolite quarry in Ivittuut, the coal quarry in Qullissat, the marble quarry and later the lead and zinc mine in Maarmorilik, and the lead and zinc mine in Mestersvig on the east coast. The cryolite quarry in Ivittuut is the one of the mining projects that until 1979 had provided the greatest socio-economic contribution over an extended period of time. Add to that a number of exploration licences for minerals and oil.

In the time before the introduction of home rule, revenue from mineral resources accrued only to the Danish State, but with the introduction of home rule in 1979, Greenland became entitled to part of the revenue. In their report, the Greenlandic-Danish Self-Government Commission of 2004 addressed three focus areas – including mineral resources – as the right to the underground was a key Greenlandic wish in the negotiations on self-government. With the introduction of the self-government in 2009, Greenland’s Self-Government acquired ownership of the subsoil and thus the right to control and exploit mineral resources in the Greenlandic subsoil. As part of the self-government agreement, it was agreed that the part of the revenue that exceeds DKK 75 million annually is to be shared equally between the Self-Government and the Danish State. The Danish State’s share is offset against the block grant. Administration of mineral resources was transferred in 2010.

In the first years following the introduction of self-government, initiating projects for the exploration of mineral resources were given high priority in order to provide the economic latitude for autonomy. However, despite the awarding of several exploration licences, only a few and small mining projects have so far been established which make a modest socio-economic contribution. Although, Greenland has even very large mineral deposits of a high value, extraction is challenged, in part, by world market prices and, in part, by climate conditions and the current infrastructure, which results in very high start-up and operating costs. In addition, the potentially largest project, Kuannersuit (Kvanefjeld) at Narsaq, contains uranium which makes extraction both environmentally and geopolitically problematic and thus a political topic.

Similarly, oil exploration in Greenlandic waters constitutes a political cross field. Cairn Energy’s 2010/11 drilling programme off the west coast of Greenland resulted in investments in the range of DKK 5 billion. Since then, exploration for oil has been limited, and by mid-2020 there were seven active hydrocarbon prospecting licences and four active hydrocarbon exploration licences. In the summer of 2021, Naalakkersuisut decided to stop exploration for – and thus potential extraction of – oil and natural gas.

In 2019, 93 people were employed in extraction of mineral resources, of which 33 came from outside Greenland. Those employed in extraction of mineral resources account for 0.3 % of the total employment. The total number also includes the local employees in the towns’ quarries.

A broader political recognition has emerged during the 2010s that if extraction of mineral resources is to become a supporting element for an economically independent Greenland, it will require that more and very large projects for extraction of mineral resources also produce and generate a socio-economic surplus over a long period of time.

Tourism

In order to broaden the business base, efforts have been made for decades to turn tourism into a genuinely leading business, and tourism has experienced gradual but limited growth. In 2019, Greenland received approximately 87,000 international air passengers, of which about half came for business purposes as consultants, researchers as well as shortterm employees in health care, education, construction, tourism, etc. There were also 46,633 cruise tourists, some of whom had flown to and from Greenland and are therefore included in the total number of air passengers.

Currently, the main tourist destinations are Ilulissat with Isfjorden and Ammassalik district to which some one-day tourists arrive via Iceland. Most parts of Greenland have great potential for tourism, but in several places the infrastructure is a barrier to the development of tourism. Some of these locations are currently visited to a limited extent by cruise tourists.

Even though tourism is very modest compared to North European countries, it contributes to the employment of about 800 full-time equivalents in accommodation and hospitality (3 % of total employment). Of these, 227 come from outside Greenland (2019). However, many of the overnight stays relate to business tourists, and local people make up a significant part of the customer base of the restaurants.

The land-based industries

The land-based industries is a common term for Greenland’s other industries and thus becomes a relatively non-homogeneous group. The following presents main industries in this group.

The building and construction industry consists mainly of private companies. The majority of building and construction activities are publicly financed and the private housing market is relatively modest. This implies that priorities for investments in construction are most made politically, where in recent decades there has been a tendency to prioritise the large towns of Nuuk, Sisimiut, Ilulissat and Qaqortoq, which have been identified as growth centres. For instance, during the period 2010 to 2019, investments in Nuuk have been approx. 15 times higher per capita compared to Upernavik. In the small insular communities, the uneven rate of investment makes it difficult to sustain private construction companies. Consequently, there is a decrease in the number of building and construction companies, which in 2019 accounted for 6.5 % of the country’s companies.

In recent years, there has been an intense construction boom mainly in Nuuk and to a lesser extent in Sisimiut and Ilulissat, and this does not include the planned expansion of the airports in Nuuk and Ilulissat and the establishment of an airport in Qaqortoq. This has created increased employment in these towns and has pushed wage levels and construction costs upwards.

In 2019, 2,024 people were employed in building and construction (7.5 % of total employment), 1,954 of which in the towns and the remaining 70 in the settlements. The building and construction industry accounts for the third highest value creation and accounted for 12.6 % of the total value creation in 2019.

The wholesale and retail trade employs 3,078 people (11 % of total employment) and accounts for 7.7 % of the total value creation. Most towns and some settlements have privately owned shops, and there are some wholesale businesses in Greenland. Most of the retail trade is handled by KNI A/S, Pisiffik A/S and Kalaallit Nunaanni Brugseni.

Established in 1992 as a subsidiary of the publicly owned KNI (Kalaallit Niuerfiat), Pisiffik A/S has shops in six of the country’s largest towns. In 2001, Pisiffik A/S was privatised and the controlling interest is owned by NorgesGruppen and the merchant fund KFI, which acquired ownership from the Danish company Dagrofa in 2015. Since 2001, Pisiffik has acquired and operated a number of specialty shops under their original names.

KNI A/S is a 100 % publicly owned company whose main purpose is to provide the Greenlandic people with groceries in the towns and settlements where it is not possible to run a business on commercial terms. KNI consists of the business units Polaroil, Pilersuisoq, KNI Engros, the sheep slaughterhouse Neqi A/S in Narsaq and the webshop Pisisa.gl. Polaroil is the sole importer and main distributor of oil and fuel for all of Greenland and has filling stations in virtually every settlement. KNI Engros is primarily a supplier to Pilersuisoq, which has retail shops in most towns and virtually all settlements and undertakes the supply obligation to the smaller settlements on behalf of the Self-Government. The additional cost of operating the smaller shops is covered primarily through profits from KNI’s larger shops. The price level in the Pilersuisoq areas is therefore higher than in the competing towns with several retail shops. In addition, KNI is in charge of postal services, banking, helistops and ports in a number of towns and settlements on behalf of other companies. Since some of these tasks would not be carried out under general market conditions, the company is paid by the Greenland Self-Government to undertake societal tasks subject to service contracts.

Kalaallit Nunaanni Brugseni (KNB) was formed in 1991 as one joint association of the Brugsforeninger (cooperative societies) in eight towns. There are a total of 17 Brugsen shops. The Brugsen shops in the eight towns are, like KNB, run by member-elected boards.

Transport and cargo handling employs 2,079 people (8.3 % of total employment) and accounts for 10.5 % of the total value creation. The subindustries are land transport, ship transport, air transport as well as auxiliary transport companies.

The land transport industry, in addition to municipality-owned bus companies in some of the large towns, consists predominantly of private companies. The proportion of people employed in land transport is around 1.5 %.

Ship transport represents 2 % of total employment. The main operator in this industry is Royal Arctic Line A/S that, like its subsidiary Arctic Umiaq Line, which provides passenger transport along part of the west coast, is a government-owned shipping company.

The air transport industry accounts for 2.1 %. The main operator in this industry is Air Greenland A/S, which since 2019 has been 100 % owned by the Self-Government, after having been owned by the Self-Government, the Danish State and SAS.

Employment in auxiliary services in transport is 2.7 % and includes freight forwarders, mechanics, boat yards, etc. In addition, the government-owned airport company Mittarfeqarfiit (established in 1988) operates the country’s 13 airports for fixed-wing aircraft, eight heliports (primarily in towns) and 36 helistops and thus constitutes a significant part of the industry.

Other service businesses include a number of sub-industries, the largest of which are information and communication with 643 people employed (2.4 % of employment), administrative and auxiliary services with 437 people employed (1.9 % of employment) and energy and water supply with 451 employed persons (1.7 % of employment). Other service businesses accounted for 20.1 % of the total value creation. The main operator in the information and communications sub-industry is Tusass (formerly Tele Post Greenland), which is a publicly owned limited company. Tusass A/S is in charge of postal services as well as the Internet, mobile and telecommunications and employs around 400 people. Greenland’s energy and water supply is provided by the government-owned Nukissiorfiit, which has about 400 full-time employees.

Public administration and service is the country’s largest industry (measured by employment), employing 11,238 of wage earners in 2019 (42 % of total employment) and accounted for 28.7 % of the total value creation. The public sector consists of the five municipalities as well as the Self-Government and includes services in public administration, healthcare, education, social institutions, judicial system and defence. The judicial system and defence are undertaken by the Danish State. In public administration and services, social institutions have the largest share with 16 % of the total number of people employed, while educational institutions have a 9 %, general public administration has an 8 % and the health sector has a 6 % share of the total number of people employed.

Participation rate, employment and unemployment

The average monthly workforce totalled 27,141 people in 2019. Of this, 25,754 people were in employment, while the remaining 1,387 people were registered as unemployed. The working-age population (18‑65 years) amounted to 36,552 people.

The remaining group of 9,411 people outside the workforce makes up a quarter of the total working-age population. Just over a quarter of people outside the workforce, or 6.5 % of the working-age population, are early retirement pensioners. This is because, for periods of time, some Greenlandic municipalities chose to transfer the long-term unemployed to early retirement because unemployment benefits were paid by the municipality, while the early retirement was financed by the Home Rule/Self-Government. Since 2015, the expenditure has been split between the Self-Government and the municipality.

People with disabilities and on maternity/paternity leave make up a fifth of the population outside the workforce, roughly evenly divided between those with disabilities and on maternity/paternity leave.

The remaining just over 3,000 people of working-age who are outside the workforce are neither working, under education nor registered as any of the aforementioned groups. Of these, 18- to 25-year-olds make up just under 2,000 people. This group is referred to as the ‘youth target group’ and is considered to be in a vulnerable position socially and economically. Several analyses show that there is generally a negative correlation between long periods outside of employment or education and the ability to support oneself later on.

In 2019, the participation rate among 18‑65 year olds was 70.5 % for the whole country. There are some differences between the municipalities with the participation rate being highest in Qeqqata Kommunia at 72.9 % and lowest in Kommune Kujalleq with a participation rate of 64.4 %.

Employment has been rising since 2014. To be registered as unemployed, a citizen must go to a labour market office to look for work and must not have been registered as unemployed in the same month.

The unemployment rate in 2020 was roughly at the same level as in countries with which Greenland is often compared, e.g. the rest of the Nordic region. At the same time, the need for qualified labour is great, which is why a significant share of labour is imported. Thus, 12 % of the employed were born outside of Greenland. An unemployment rate of 5.1 % and a quarter of the working-age population outside the labour market as well as a continuing need for outside labour suggest a need for structural changes in the labour market and, not least, a higher level of education.

Further reading

• Building customs and architecture
• Education
• Health and care
• Home Rule (1979‑2008)
• Housing
• Hunting and subsistence economy
• Infrastructure
• Locations with agriculture and sheep farming
• Plans in Greenland
• Population and demographics
• Self-Government
• The five regional municipalities
• The Greenlandic insular community
• The Unity of the Realm and the Danish State
• Towns and settlements

Read more about Society and business in Greenland