17. Aug 2026
Faroese enterprises at the forefront of innovation in the Nordic region
An innovative enterprise engages in innovation in at least one of seven areas. An enterprise could be innovative within products, services, or business processes; conducting or purchasing research and development; completing an innovation that has not yet been implemented or brought to market; abandoning or postponing innovation activities; or having ongoing innovation activities that remained unfinished at the end of the survey period.
A total of 61 percent of Faroese enterprises engage in some form of innovation. Enterprises in the Faroe Islands, Sweden, Norway, and Finland are at similar levels, with only three percentage points separating them. In Denmark, 48 percent of enterprises are innovative. Data for Iceland are unavailable for 2022–2024. In the preceding period, 48 percent of Icelandic enterprises were innovative.
Faroe Islands rank lowest in product and service innovation
Business process innovation is more common than product and service innovation, both in the Faroe Islands and in other countries.
Business process innovation is a new or improved approach to any area of an enterprises operations. This includes new or significantly changed methods for producing goods and services, distribution and logistics, data processing, or communication. Product or service innovation occurs when an enterprise offers a new or significantly improved product or service compared with what it offered previously. The product or service may be new only to the enterprise or new to the market.
Half of Faroese enterprises engage in business process innovation, while 17 percent innovate in products and services. Compared with the other Nordic countries, Faroese enterprises have the lowest rate of product and service innovation. The corresponding figures are 33 percent in Sweden, 32 percent in Norway and Finland, 25 percent in Denmark, and 29 percent in Iceland.
More than half are innovative
During 2022–2024, 60% of Faroese enterprises with more than nine employees engaged in innovation. This is three percentage points higher than in the previous survey period, 2020–2022.
Notably, all enterprises in the Information and Communication sector (J) are innovative. This is true for both periods surveyed. In aquaculture, 80 percent of the enterprises are innovative, while half of the enterprises in the fishing industry are innovative. The total number of enterprises with nine or more employees has increased by 4 percent, corresponding to 16 enterprises.
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Little change since the previous period
The largest change since the previous period can be seen among enterprises with ongoing innovation activities that had not been completed by the end of the survey period and were therefore still in progress.
Faroese enterprises focus on existing customers
When asked how important various business strategies are, 71 percent of enterprises say that focusing on the satisfaction of existing customers is highly important. More than half also say that offering the highest-quality products and services (quality leadership) is highly important.
Meanwhile, 16 percent of companies say that focusing on developing new products and services is highly important.
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Net sales from new or improved products decreased by DKK 323 million
Net sales from new or significantly improved products and services—whether new to the enterprises or to the market—were DKK 323 million lower in 2024 than in the previous survey in 2022.
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Lower investments in research and development
Total investment in research, development, and innovation amounted to DKK 748 million in 2024, DKK 147 million less than in 2022. The decline is mainly derived from the lower investments in research and development, a decline by DKK 105 million. This is consistent with the previously published research and development investment statistics.
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More statistics on innovation are available in the statbank. The figures include details on funding, collaboration as well as risk assessment and the impact of external factors.
Innovation active companies
Innovation active enterprises offer a new product or service. They may also have developed or are in the process of developing a new product, service or new work procedures. Innovation also includes companies that have carried out or purchased research and development.
Methodology
The statistics are compiled in accordance with international standards on innovation used by Eurostat and the Oslo Manual for Innovation. The data is collected through a survey sent to all companies in the Faroes with ten employees or more. The survey will be conducted every two years.
Total statistics
Total statistics is the total number of companies included in this survey.
Industries
The industry classification is based on the statistical classification of economic activities in the European Community (NACE). According to the Oslo Manual on Innovation, the following industries cannot be used for international comparisons on innovation: ‘Agriculture, forestry and fishing’, ‘Accommodation and food service activities’, ‘Administrative and support service activities’.