On the topic:
“Government innovation policy in Norway”
OVERALL ASSESSMENT AND RECOMMENDATIONS
Norway’s economic performance has been consistently very good for a long time, and average real incomes are now among the highest in the world. The growing size and profitability of the offshore hydrocarbons sector has been a major factor, but even if it is excluded from the calculations, per capita GDP in mainland Norway is comparable to that of neighbouring Finland and higher than that of the major EU countries. Norway is also one of the best-performing countries in terms of growth and level of labour productivity, especially in private services. However, the “summary innovation index” (SII), a synthetic indicator used in the EU’s “Innovation Scoreboard”, puts Norway below the EU25 average in 2007 (and the EU25 average is well below the US and Japanese scores). In addition, Norway’s performance on this synthetic indicator has deteriorated over the years. Against this background, the “Norwegian puzzle” – i.e. that Norway “underperforms” against conventional S&T and innovation indicators despite its persistently high economic performance – has received some attention. However, it is well known that contributions to innovation and economic performance include forces such as, inter alia, the strong “social contract” between the state, labour and capital that promotes social welfare, and a high level of acceptance of technological change in the labour force. Low business sector R&D expenditure today can be largely “understood” by the industrial structure’s smaller share of R&D-intensive industries than the OECD average. Non-R&D-based innovation, such as innovation in the service sector and in the organisation and the business model of enterprises, which is difficult to capture by available quantitative indicators, seems to underlie the exceptional productivity performance of the private services sector, which would otherwise be hard to explain. The key strategic task ahead is to maintain high, sustainable growth even after oil and gas production has peaked. Any foreseeable restructuring of the Norwegian economy compatible with this goal will entail a shift towards other knowledge-based activities. Policies to strengthen innovation capabilities, including the R&D component of the innovation system, are needed. While this review argues that improved innovation capabilities require sustained increased investment in R&D, it also emphasises that Norwegian policy must translate these needs into concrete, mobilising and credible goals for all stakeholders. The “Barcelona objective” of 3% aggregate R&D intensity does not fulfil all of these criteria. In particular, given the nature of the Norwegian economy and its specialisation patterns, the likely failure to achieve this quantitative target could unfairly damage the credibility of Norway’s science, technology and innovation policy. A preferable approach might involve developing a (set of) sufficiently large programme(s) which could build on Norway’s comparative economic advantages and capabilities in science and technology, and mobilise public and private actors towards common goals supported by a broad social con- sensus. More than many other countries, Norway has nurtured strong social support for action to contribute to solving problems of global relevance, such as sustainable development1 and related issues. Large-scale programmes to address such topics could potentially have widespread impact on Norwegian industries and science and technology fields. Carefully crafted, they would strengthen the shift towards a more knowledge-based economy. While framework conditions for increasing R&D and innovation are largely in place – especially those relating to the overall education and skill levels of the population – some...
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