Speech on industrial change beyond year 2000

Last Sunday we were one thousand days away from the turn of the century.

Industrialists know all too well that a single date - even if it marks the start of a new millennium - makes little difference to the great changes of modern times.

Kongsberg can tell a long story of industrial transformation and of structural change in a Norwegian setting. This part of Norway has been a center for industrial activities since the 16th century.

In the beginning, it was silvermining that made Kongsberg a focal point for technological and industrial advances. Back in 1805, the mines were closed down and people lost their jobs. But soon there were new opportunities. A few years later Kongsberg Ironworks was established. Then followed two centuries of guns, canons and weaponry - the long story of Kongsberg Våpenfabrikk. In Kongsberg there was no choosing between guns and butter. Guns provided the butter.

That story came to an end ten years ago, as most of you will remember. Once again the Kongsberg community was threatened. But once again there were new opportunities. Out of the giant state owned company grew a variety of activities. Kongsberg managed another structural change.

Today, the best description we can give of Kongsberg is variety. Kongsberg is an industrial stronghold with a flora of plants in the technological forefront of world competition.

The common denominator for this industry is advanced use of technology, in particular of information technology. The 50 companies of the business park provide more than 3000 jobs and a string of related services to the entire region.

So before we look to the future, let us try to sum up the key elements of the Kongsberg story - a story that tells a lot about what we will have to expect from the challenges in the century to come.

First of all, where there used to be dependence on a single industrial sector, there is now diversity. A visit to the industrial park tells it all.

But more important, where there used to be dependence on minerals and raw materials, there is now dependence on intelligence and knowledge.

This is the key: The industrial mining pioneers had no alternative. They had to choose Kongsberg back in the 1620s. This was the location of the silver mines. This had to be the location of related industries.

Today, there is no natural reason why Kongsberg should be a dynamic industrial center in Norway. Of course, there are strong industrial traditions in the Kongsberg area. But the same can be said about the mining districts in Alsace Lorraine. Past achievements give no guarantees for the future. Information technology makes time and distance increasingly irrelevant. Most things can be produced everywhere and sold anywhere.

None of the companies located in the Kongsberg industrial park had to stay in this area. In theory as well as in practice, they could decide to locate many other places in the world.

But Kongsberg remains a competitive location. This is a vibrant technological community. Impressive knowledge is based here. Kongsberg has among the largest proportions of people with education at university level. The region has developed its own schools where the curricula have been adopted to the needs of industry.

On this basis the Kongsberg industry serves some of the most demanding customers in the world. Today, Boeing could not be operative with their planes had it not been for the knowledge base at Norsk Jetmotor. Statoil could not attract more oil and gas out of the wells in the North Sea had it not been for the technological innovation at Kongsberg Offshore. And Volkswagen could not have produced lighter and cheaper cars had it not been for the world leading technology of Kongsberg Automotive.

This is the picture today. As before, we cannot issue any guarantee for the future. The mining industry declined gradually. Today, changes may come overnight.

Many in this audience know what it takes to succeed. Industrial success is a complicated process. But we can simplify some of the criteria for a successful industrial environment.

We need democracy and stability. We need qualified people who can provide a solid knowledge base. We need a modern infrastructure. We need a business climate that can attract investment. We need a social climate that promotes cooperation, social dialogue and the sharing of risks as well as of opportunities.

I believe these criteria will remain essential far into the next century. I believe that the reason behind the Kongsberg success story can be found in the positive mix of those criteria. Today, Norway has a favorable climate for advanced industrial production. For the first time since the 1970's, the number of employees in the industrial sector is slowly increasing. The financial situation of Norwegian companies, small and large, has rarely been more solid.

How then, can we secure a continued leading role for Kongsberg well beyond year 2000? How can we prepare a future for modern industrial growth in Norway - located at the outskirts of Europe?

Let me begin by a personal conviction; Norway has the potential to make the transition to a knowledge based economy. In fact we have already come far.

I would like to highlight some perspectives seen from the viewpoint of the Government.

First, there is what I would call the social foundation. When I meet European colleagues I am often asked how Norway managed to turn its economy around back in the 1980s. It is easy to suggest that it must be thanks to the revenues from oil and gas. True, income from the North Sea is no disadvantage. But the main explanation lies elsewhere.

We call it the solidarity alternative - that the social partners and the government combine forces and jointly secure a competitive economy. The basic idea is simple: We can achieve more if we pull together.

This is for me the expression of a new mentality which I believe is vital for success in the information society. We need cooperation, dialogue and joint problem solving. We need a global vision that can match the many sectoral interests.

That is why I believe the tradition of a close and direct relationship between the social partners is a vital asset, not least for industry. Some say it is too time-consuming. I say it is just the opposite. We save time as well as resources by bringing along the broad spectrum of society in the process of change. We live in times of profound changes. The legitimity of economic and industrial activity is based on a fair distribution of profit and opportunity. It is only by sharing responsibility that people will act responsibly.

Then there is the new approach to work. In the past, he who owned the machines had the upper hand. Now this is all changing. A growing number of employees practically own their own workplace. They carry it in their heads.

There are still economic and social divisions, but they are much harder to define. Today's society cannot be governed with a top-down approach. We cannot hide information in the age of the Internet. Good governance and good management is about cooperation, motivation and innovation.

Providing equal access to education and life long learning is a main contribution to tomorrow's industry. Only 10 per cent of Norway's national fortune is oil and gas. More than 70 per cent is human resources. This is the natural resource of the future. Silver made Kongsberg an industrial focal point. The road towards the gold medal lies in knowledge.

All industrial countries realize this. Access to a qualified workforce has already become a vital asset for attracting investment.

My Government has opted for a broad educational reform. We have reformed secondary education by significantly broadening the access. We have strengthened the capacity at the universities. Now we turn to life-long learning. Our aim is to strike the following balance: we want a reform that can strengthen the knowledge base in the companies - and at the same time provide each man and woman with a more interesting and stimulating job.

Again we call for a joint approach. This reform will be conceived, developed and financed by the social partners and the government jointly. We expect to see this as a main topic at next year's main round of negotiations between the social partners.

Let me then move to the technological challenge. I am in no position to predict what advances technology may bring into the next century. If the present growth rates continue, every man on earth will be connected to the Internet in 2003. We know that will not happen. But it illustrates the scope of the technological revolution that we now experience.

If Norway is to secure a favorable industrial environment in the age of the Internet, we have to be in the forefront of information technology. Kongsberg can never be the geographical center of the market place. In a sparsely populated country like Norway, we must take advantage of the new technology, not only to shorten distances but also to play in the first division of innovation.

We have already come far. Norway has the highest rate of investment in the field of telecommunications and information technology, pr. capita or in relation to GDP.

We used to have the highest telephone prices in the world. Now the prices are among the lowest. Finnmark in the high North was the first county to get a fully digitalized telecommunications network. By the end of 1997, the entire Norwegian network will reach the same standard.

Our aim is then to make technology available. The Labour party has had one basic approach to education: equal access. We apply the same approach to the new technology: equal access. If we fail, we will give an ultra green light to new divisions between people. The division will no longer go between the "haves and the have nots", but rather between the "cans and the cannots". The knowledge based technologies have the potential to reduce differences between people - if we take particular care to make the technology as well as the knowledge available to all.

We need to build, modernize and expand the networks - networks for business and industry, networks for public administration, networks for the health care sector, networks for the libraries and universities.

Industrialists have a prime responsibility for keeping the pace at an increasingly global market place. In my view, the state should play a supportive role. This is not the time for giant state run companies as we experienced with Kongsberg Våpenfabrikk. But I believe that we can contribute to both stability and a more long term perspective by being present also among the shareholders. The state is responsible for a substantial part of the total savings in Norway. The state should develop its ownership strategies in order to secure acceptable return on public financial resources.

What industries will expand and what industries will stagnate? It is hard to predict. I believe the knowledge factor will be key for any industry. That is why we must make it our common priority.

But one thing is almost given; Norway is and will remain an energy nation. We estimate that 20 per cent of the total petroleum resources has been produced, 50 per cent is remaining unexplored resources while 30 per cent has still not been identified. Less than 10 per cent of the gas resources has been produced.

Norway provides Europe with an increasing amount of environmentally friendly natural gas. Just as an example - in a few years we will provide more than one third of the total German and French consumption of natural gas.

We have built our own oil and gas industry from scratch. Our ambition should be to take advantage of our experience on markets beyond the North Sea. Today we can compete with anybody in the world. At the same time, being in the front in the energy sector makes another thing quite clear; we must also be in the front in the environmental sector.

This will be an increasing challenge to industry. Significant progress has been made - and further significant progress is needed. This year we may reach agreement on a binding climate convention. Reaching an ambitious agreement in Kyoto in December will require the very best of our global political and diplomatic skills. The follow up of Kyoto will require the very best of the technological and innovative skills of industry.

So let me sum up: The most striking challenge is to secure the knowledge base for the next century. It will serve industry, it will offer people a more meaningful life and the society as a whole will benefit. New knowledge is needed to make the vital change towards a more sustainable world economy.

I believe in a simple vision: All 7 year old children should be able to read. All 12 year old children should have access to a PC. All 19 year old youth should have access to first class higher education and all people between 30 and 80 should have the opportunity to develop, renew and refine their knowledge base.

Then there is the challenge of redistribution, securing equal access to education as well as to technology. As a part of this, we should continue to benefit from a culture of social dialogue. I repeat what I said at the outset, this is a competitive asset for Norwegian industry.

And finally it will be up to industry to thrive in an increasingly global environment full of challenges and opportunities. The industrial park in Kongsberg is full of talent and creativity. We will need it all as we finish what is left of the remaining thousand days of the 20th century.