Small Business from Small Islands: The NISSOS Project and its Partners


The NISSOS Project has been searching for such exceptionalities and looking at their transferability. A 3-year pilot project (2003-2006) kindly supported by the European Commission through its Leonardo da Vinci vocational training program, NISSOS has sought to develop a learning pack which is sensitive to, and based on, the best practices and experiences of successful, small scale manufacturing firms based on their own small island territories. This training manual is one of the project outcomes.

NISSOS is the Greek word for island. Studying islands has been referred to by Grant McCall (1994, 1996) as ‘Nissology’. NISSOS is also the acronym for Network of Islands for Small Scale Organizational Success.

Deciding on the meaning of business success was not easy. High levels of annual turnover? High levels of profitability? High levels of employment? Very long periods of firm existence? None of these was chosen.

Eventually, success was defined in terms of five variables which best capture a sense of local entrepreneurship and a local maximization of the value added derived from any production process. Adopting these five variables also meant that the number of firms to be examined as success stories from the five participating island regions would be relatively few and therefore no sampling would be necessary. Only those firms which fulfilled all five variables were adopted. 

The five variables defining success chosen by the NISSOS Partners are:



  1. local ownership, meaning majority or exclusive control of the firm is vested in individuals who are native islanders;
  2. small size , meaning firm has up to 50 employees or outworkers;
  3. manufacturing , meaning firm is producing a commodity that has weight, volume or form, which can be separated from its producer in the act of sale or purchase;
  4. export orientation , meaning the bulk of the firm’s manufactures are destined to off-island markets and clients and have been so for at least three previous consecutive years; and
  5. technology adaptation , meaning that any key technological processes used by the firm in the manufacturing operation have been customized, if not invented, by the locals.

There are 11 project partners in NISSOS. Two come from each of the five participating regions, one oriented towards education, the other oriented towards small businesses. The University of Malta is an additional, third partner for Malta.

The NISSOS Project Partners

Island Territory

Education Partner

Business Partner



Åland Polytechnic

Åland Trade Association


Institute of Business Studies,

University of Iceland

Iceland Technological Institute


Foundation for Human Resources Development & University of Malta

Malta Enterprise


Tallinn Technical University ( Saaremaa Campus)

Estonia Chamber of Commerce & Industry

Scottish Isles

UHI Millennium Institute

Highland Council

The 11 partners hail from 5 European island territories: the Åland Islands (Finland), Iceland, Malta, Saaremaa (Estonia) & the Scottish Isles (United Kingdom).

The Åland Islands
Åland has been an autonomous territory within the state of Finland since 1921. The 6,500 island, demilitarized archipelago supports a Swedish –speaking population. The islands are positioned in the Baltic sea, practically half-way between Eastern Sweden and South-Western Finland, about 65 miles east of Stockholm, the Swedish capital.Åland’s economy is heavily dominated by shipping, trade and tourism. Shipping represents about 40% of the economy with several international carriers owned and operated off Åland. Most companies outside shipping are small companies with less than ten employees. Farming and fishing are important in combination with the food industry. A few, but high profile, technology companies contribute to a well-off economy. There are tax-free sales on Åland ferries travelling between destinations within the European Union; but this has also made Åland a different tax-zone, meaning that tariffs must be levied on goods brought to the islands. Capital city: Mariehamn.

Iceland is a large island located in the centre of the North Atlantic, almost half way between Britain and the east coast of the USA. Located at the point where two continental plates collide, the island is an active volcanic region with an abundance of geothermal power. The economy still depends heavily on the fishing industry, which provides 70% of export earnings and employs 12% of the work force. A former colony of Denmark, Iceland proclaimed its independence in 1944. The government remains opposed to EU membership, primarily because of Icelanders’ concern about losing control over their fishing resources. Iceland’s economy has been diversifying into manufacturing and service industries in the last decade, and new developments in software production, biotechnology, and financial services are taking place. The tourism sector is also expanding, particularly in the niche area of ecotourism. Capital city: Reykjavik.

Malta is a three-island archipelago located at the centre of the Mediterranean sea, between Italy and North Africa. For many years serving as a military base to foreign powers, the islands have in recent years transformed themselves into a freight transshipment point, a financial centre, and a tourist destination. Malta produces only about 20% of its food requirements, has limited fresh water supplies and has no domestic energy sources. The economy is dependent on foreign trade, manufacturing (especially electronics and textiles), and tourism. Malta secured independence from Britain in 1964, became a Republic in 1974, and a member of the European Union in 2004. Capital city: Valletta.

Saaremaa – which translates as ‘ Island’s Land’ – is the largest island of an archipelago located off the mainland coast of Estonia. Saaremaa, literally ‘ Island’s Land’, is the second largest island in the Baltic Sea. The island, as part of the Estonia, achieved independence in 1991, after spending many years as part of the Soviet Union. Saaremaa is covered by forests, wooded meadows and limestone areas covered with thin soil and stunted vegetation. The major local minerals are dolomite, limestone, curative mud, and on a smaller scale mineral water, sand, gravel and ceramic clay. Saaremaa is a county, divided into 17 municipalities, each with its own local authority, the largest, Kuressaare (the capital city) having had municipal rights since 1563.

The Scottish Isles
The Scottish Isles, of which at least 87 are populated, are governed by 7 different local authorities (called councils) within the 32 that cover the whole of Scotland. Three of these councils – Shetlands, Orkneys and Western Isles – are made up exclusively of islands. The other four – Highland, Argyll & Bute, Skye & Lochalsh and North Ayrshire – contain both island and mainland territory. The population of the Scottish Isles is just 2% that of Scotland. Textiles, beer and whisky are among Scotland’s chief exports; though tourism and fisheries remain important to the Scottish Isles. North Sea oil and gas has gained prominence in Scotland’s economy since the 1970s. A devolved Scottish Parliament has, since 1999, been given powers to govern the country on certain purely domestic matters and has limited tax varying capability.



Small Business from Small Islands – NISSOS Project 

Overview | Acknowledgements | Introduction | The NISSOS Project and its Partners | Showcasing Successful Manufacturing Firms | Research Methodology | Discussion: Raw materials | Discussion: High-tech | General Conclusions

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