Located in the middle of the northern Atlantic Ocean, Iceland is the second largest island in Europe. The shortest distance to Greenland is 278 kilometers (172.7 miles), to Scotland 708 kilometers (440 miles) and to Norway 970 kilometers (602.7 miles). Icelanders are descendents of the Norse and the Celts, and most Icelanders belong to the Evangelical Lutheran Church. Iceland's population in 2005 was nearly 300,000, a number that has more than tripled in the past century. The majority lives in the southwestern region, in and around the capital of Reykjavik.

Urbanization was very rapid in the twentieth century and was associated with a move from farming into industry, construction, commerce, and services. The transformation of Icelandic society almost perfectly traces the aftermath of the European industrial revolution, only at a higher speed. After centuries of almost total isolation, Iceland increasingly came into contact with both European and North American countries. The present process of globalization thus...