Statssekretær Karin Yrvin

Innovation and Entrepreneurship
Common challenges, cooperation and Norwegian policies

Fudan University, Shanghai 21. september 2006

Contents

1. Introduction – the BI-Fudan collaboration in context
2. China and Norway:
3. • Mutual challenges – globalisation
   • Common objectives – innovation and entrepreneurship
   • Collaboration – trade, education and research

3. Case Norway:
4. • The Nordic model
   • Innovation and research policies
   • Entrepreneurship

4. Summary and final remarks

Professors,

Ladies and Gentlemen.

Dear students,

Dear friends.

Let me first say how pleased I am to be here today

and express my gratitude for the opportunity to speak in this class.

innovat

You are a perfect example of the good cooperation between the People's Republic of China and Norway.

We can look back at a long friendship:

The first Norwegian businessmen settled here in Shanghai in the 1860s.

This year, we celebrate several anniversaries:

• It is 160 years ago since the first Norwegian ship arrived in Shanghai

• It is a hundred years since the first official visit from China to Norway
• It is ten years since the Norwegian Consulate General opened here in Shanghai
• And: This year also marks the 10th anniversary for the collaboration between the BI Norwegian School of Management and Fudan University.

You who are here today are part of a long and proud tradition.

The interaction between our two countries will continue to grow in the future

and you are excellent ambassadors for this development.

Today, there are more than a thousand Chinese senior managers who have a master’s degree from BI.

No doubt, this will lead to stronger relations, increased trade

and most importantly: mutual learning and profit for our two countries.

It is a great pleasure to be able to share some thoughts with you on strategies for innovation, entrepreneurship and industrial development.

Norway and China are very different countries in many ways.

Your country is 30 times bigger than mine!

But we also have a lot in common.

Let me start by sharing some thoughts on our similarities.

In the global economy, China and Norway share many challenges.

Our industries are faced with increased global competition.

Globalisation makes it crucial to be alert, to improve our ability to change and make the most of our human capital.

Not surprisingly, innovation and entrepreneurship is a central part of the answer to these challenges – in China and in Norway.

China and Norway also share many of the same objectives. We want to:

• Strengthen our welfare systems
• Increase social justice and equality
• Create jobs for everyone
• Develop strong and competitive industries
• And ensure sustainable economic growth.

Strong international relations can help us achieve these objectives.

Globalisation means

• more contact
• more competition
• and more collaboration.

We have a paradox here:

Competition and collaboration are normally seen as opposites.

But: Increased competition demands increased collaboration.

This is the reality that you students here in Fudan will live and thrive in.

And it is the reality that Norwegian students will have to live and thrive in.

It is your challenge and I am sure that you will rise to it.

Increased competition and collaboration equal increased international trade.

Our enterprises are exposed to intense competition.

An effective trade system is very important to our enterprises.

Besides, trade and cross-border investments are important channels of knowledge into our economies.

This goes for China, Norway, and all countries in the global economy.

The game of international trade must be fair.

We need a set of rules.

Today, China and Norway are partners in the World Trade Organisation.

Following your membership in 2001,

China has prospered from a period of strong economic growth.

I was in Hong Kong last December during one of the rough spots in the Doha negotiations.

I was saddened by the outcome!

However, China played a constructive role.

I am glad to note that both China and Norway are committed to resuming the Doha negotiations as soon as possible.

We can’t afford to give up!

It is our responsibility, together with the rest of our partners in the WTO,

to work together towards a successful conclusion of these negotiations.

It’s our obligation to lay down a sustainable foundation for employment, economic growth and welfare.

If we do not succeed, the costs will be tragic.

If we succeed, the benefits will be enormous.

This brings me to the close relationship between our two countries.

In recent years, our economic interaction has grown strongly.

China’s growing role in the international economy

gives us new challenges – and enormous possibilities:

• Our industries face harder competition
• And access to new markets for their products

Today, China is Norway’s biggest trading partner in Asia.

There are currently around 200 Norwegian companies in China.

There will be more.

Chinese presence in Norway is also growing and we welcome it.

Maybe some of you will represent Chinese companies in Norway in the future.

My government works actively to open talks about a trade agreement between China and the EFTA countries – Norway, Liechtenstein and Iceland.

We have, and are about to enter,

agreements with China in a number of areas:

like tourism, investments, energy and maritime innovation.

Research and education is another important area of collaboration.

Knowledge, research and innovation enjoy great political attention across the world.

And: research and other innovation activities are international by nature.

Innovation is not an individual sport.

It is a team sport.

No nation, be it a big economy like China or a small one like Norway,

can rely on its own assets alone to achieve real progress.

We have to exchange knowledge.

Long term co-operation,

like between Fudan and BI,

is a model for the future.

In the research area,

we look forward to enter a new bilateral agreement with China.

This agreement will be between your Ministry of Science and Technology and our Ministry of Education and Research.

I am also very pleased that we now have a Memorandum of Understanding between China, Singapore and Norway on co-operation in maritime research and development.

The agreement was signed on the 28th of August.

I believe China is investing heavily in the maritime industry.

You will compete with Japan and South Korea

to be the leading shipbuilding nation in the years to come.

The maritime sector is also a strong sector in Norway.

Further development in the maritime industries is a high priority to the Norwegian Government.

No doubt, cooperation in this area will be very fruitful to our countries.

Yesterday, I opened DnB NOR’s new office here in Shanghai.

DnB NOR is Norway's largest bank.

DnB NOR is also a major financial partner for the maritime industry in Norway.

The establishment will be beneficial for Norwegian businesses in China

and for the development of the Chinese maritime industry.

Such cooperation

with mutual benefits

is very important to us.

Now: What is innovation all about?

In a sense,

innovation is about using and developing our resources

in a best possible way.

This applies to our natural resources, like petroleum or fish

And our human resources.

I know that you are working hard to do so in China

and you do it pretty well, because your economy is growing rapidly.

But still: We have to keep on our toes

in China and in Norway –

and be able to innovate.

And innovation is a high political priority.

In my Government’s program we state that:

Norway is to become among the world’s leading, most innovative, dynamic and knowledge-based economies in areas where we have competitive advantages. Norway shall be a good place for business activity.

But how, exactly, do we facilitate innovation and entrepreneurship in Norway?

First, a few words about Norwegian society.

Let me briefly describe the social framework in Norway

which is important for the direction of our innovation policies.

The large public sectors are one of the major peculiarities of Norway and Northern Europe.

The Nordic countries are described as the ” bumblebees of Europe”.

We have large public sectors that demand huge efforts.

We have high wage and tax levels.

In theory, we cannot compete:

We are too heavy to fly.

But like bumblebees, we fly anyway

– and even quite well.

The bumblebee supports the belief that our welfare states are not a burden – but the basis of our prosperity and social cohesion.

It shows that competitiveness and social security are not contradictions –

but pre-conditions for each other.

Some of the world’s most competitive economies

- Denmark, Norway, Sweden and Finland –

are those that offer some of the best

social protection and workers’ rights.

In short, fair play and growth are mutually supporting.

This is why

• better employee protection
• and better kindergartens, schools, hospitals and nursing homes.

are not only policies for wealth distribution.

They are also policies for wealth creation.

This is the Nordic model in practice.

But mind you, our model is not perfect.

We have to improve.

And we share many challenges with China.

That is why we are here.

Also to discuss what we can do better.

Social stability walks hand in hand with economic stability.

Our economic policy shall ensure stable conditions for innovation and business activity.

But stability is not enough. We need something more.

We need active policies for innovation and entrepreneurship.

The Norwegian government aims to

• Support innovation in all areas
• increase investments in R&D
• and develop our human capital

Knowledge and research is a top priority in Norway.

We work to increase R&D activity in our companies.

Quantity, however, is not enough.

We also need quality and relevance.

Whether I want to

• open a Norwegian restaurant in China,
• develop an educational computer game for nine-year olds,
• or make the fish in my fish farm grow faster,

I need high quality and very specific knowledge.

This requires close ties

between me as knowledge user and the knowledge producer

Business relevance is an important aim in our research policy.

Therefore, we have a bottom-up approach in many of our programs

Where the companies themselves start and manage the research projects.

Innovation is about making profit from ideas and knowledge.

This is why we invest in new knowledge through research.

But: It is the enterprises that bring innovations to the market.

Therefore, the entrepreneur is a very important person in the innovation process.

And therefore,

the Norwegian government leads an active policy forentrepreneurship.

We want it to be simple and easy to start a business.

The "Simplifying Norway" initiative reduces administrative burdens,

and our seed capital schemes helps start-up businesses to reach investors.

These are important policies.

In my opinion, diversity is important for innovation. To become more competitive, we must use everyone’s talents – not only half of the population. Only 25 percent of the entrepreneurs in Norway are women. Therefore, my government is now working on an action planfor female entrepreneurship.

We also want to start with the young generation.

The organization “ Junior Achievement – Young Enterprise Norway” offers a practical program

where young students learn to set up and run a business by doing it.

They often come up with innovative products and services.

17 per cent of the students from the program end up starting their own business later in life. The normal rate is 7%.

Our efforts have shown some results already.

This summer, the student enterprise “Flush” won the European championship for student enterprises.

Our aim is that our policies shall result in new and prosperous Norwegian businesses operating on the world market.

And our challenge – which we all share –

is to make the most of our opportunities.

To sum up:

Norway shares many of China’s challenges, objectives – and tremendous possibilities

We want to become innovative, competitive and prosperous

This requires

• competition and collaboration
• a free and fair international trading system
• social equality and economic stability
• and active policies for innovation and entrepreneurship

Like your MBA class shows, China and Norway can cooperate on a wide range of areas.

Let us continue to do so

and increase collaboration between our two countries

for mutual learning, profit and growth.

Thank you very much for your attention.