Chapter 34. Norway

Figure 34.1. Structure and performance of the SME sector in Norway
Figure 34.1. Structure and performance of the SME sector in Norway

Sources: Chart A. C, D: OECD Structural and Demographic Business Statistics Database 2018, http://dx.doi.org/10.1787/sdbs-data-en; Chart B: OECD Timely Indicators of Entrepreneurship Database 2018, http://dx.doi.org/10.1787/sdbs-data-en; Chart E: OECD Structural and Demographic Business Statistics Database 2018, Employer Business demography dataset.

 StatLink http://dx.doi.org/10.1787/888933925445

SME business conditions and access to strategic resources

Institutional and regulatory framework

Norway has a mixed performance on indicators related to the institutional and regulatory framework, and diversification of the economy will require strong framework conditions for SMEs. Recent policy efforts to reduce red tape include the establishment of a “better regulations council”. Progress in specific areas has included lighter social security reporting requirements for employers, simplification in building and planning legislation and simplified tax rules for business partnerships. Since its establishment in 2003 the government portal for enterprise (Altinn) has been working to simplify administration using digital solutions. A project revamping the ICT of the labour and welfare administration (NAV) is underway.

Market conditions

Norway is a small open economy with a longstanding trade in maritime transport and petroleum-related products and services. Crude oil and natural gas account for half the country’s exports. However regulatory indicators on services trade point to above-average restrictiveness in many sectors. This is the case in particular in computer and telecom services. In 2017, the country launched its Strategy for Export and Internationalisation. One of the ambitions is to increase the export potential of small businesses and to diversify trade towards emerging economies. Norway is currently negotiating trade agreements with Argentina, Brazil, China, India, Indonesia and Russia..

Infrastructure

Norway’s policy emphasis on sustaining rural and remote regions plays an important role in enabling connectivity for SMEs through transport and communications infrastructure. The current National Transport Plan 2018-29 focuses on improving connectivity in road and rail networks and achieving zero emissions growth. The proposed budget for the 12-year plan is NOK 1 064 billion, implying an average allocation of around 2.7% of current annual GDP.

Access to finance

The majority of SME lending is long-term in Norway, reflecting the strength of legal rights and the depth of credit information in the country. Venture capital investments have been growing since 2012. In 2015, the Norwegian government introduced a new action plan for entrepreneurship, which includes increased entrepreneurship grants, financing of commercialisation of publicly financed research, new seed capital funds, and a pre-seed capital fund that will invest in young companies in collaboration with private investors.

Access to skills

Norway performs well compared to the OECD average on adult literacy, although some aspects of performance on student proficiency and entrepreneurial skills are below average. A priority of the Norwegian government is to increase education and training efforts towards economic diversification away from petroleum-related activities, along with addressing population ageing. To this end, the Norwegian Strategy for Skills Policy 2017-2021 was launched in 2017. In addition, a committee examining future skills needs has been established. The promotion of entrepreneurial skills such as project planning and STEM skills is part of the strategy. Skills Norway has been established as a dedicated agency addressing basic adult skills such as literacy, numeracy, oral communication and the use of ICT.

Access to innovation assets

Norway’s R&D expenditure is around 2% of GDP, much of it in the petroleum-related sector. According to the EU’s 2016 Innovation Union Scoreboard, Norway performs well in terms of its research system, but less strongly on indicators related to high-technology industries and innovation activities and expenditure, particularly in SMEs. The backbone of Norway’s support for business innovation is a R&D tax credit programme (Skattefunn) designed to stimulate research and development. The Norwegian innovation agency Innovation Norway provides support for strong start-ups, clusters and firm growth. Transfer of knowledge across sectors is actively encouraged by the cluster programmes and the Research Council of Norway through strategic programmes.

The full country profile is available at https://doi.org/10.1787/34907e9c-en

References

Hemmings, P. (2018), “Norway’s economy: Maintaining a successful business sector in a changing world”, OECD Economics Department Working Papers, No. 1459, OECD Publishing, Paris, https://doi.org/10.1787/ce338dc9-en.

NTP (2017), National Transport Plan 2018-2029, Meld. St. 33 (2016-2017), Report to the Storting (White Paper).

OECD (2017), Digital Government Review of Norway: Boosting the Digital Transformation of the Public Sector, OECD Digital Government Studies, OECD Publishing, Paris, https://doi.org/10.1787/9789264279742-en.

OECD (2017), OECD Economic Surveys: Norway 2018, OECD Publishing, Paris, https://doi.org/10.1787/eco_surveys-nor-2018-en.

OECD (2017), OECD Reviews of Innovation Policy: Norway 2017, OECD Reviews of Innovation Policy, OECD Publishing, Paris, https://doi.org/10.1787/9789264277960-en.

Skills Norway (2018), SkillsPlus, https://www.kompetansenorge.no/English/Basic-skills/Competenceplus/.

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