Thank you, Ambassador Vollebæk, for the invitation to this open meeting in the Forum’s Steering Committee. Committee members, ladies and gentlemen, I am looking forward to take part in this meeting and also to learn more about the activities of the Norwegian Research and Technology Forum in the United States and Canada.

The Research and Technology Forum was established as a priority measure in the strategy for Norway’s relations with the United States in 2001. The reason for establishing the strategy is of course the economic, political and security bonds that exist between the US and Norway, and the desire and need to maintain and develop these.

The main focus of the Research and Technology Forum will have to be along the same lines. Our bilateral research, education and technology relations with the US also need to be maintained and developed. I am in this regard first and foremost preoccupied with the possible contribution by Forum activities to increased value creation in Norway. This is after all an overriding priority for all activities in the Ministry.

Our future welfare depends on our ability to create and use new knowledge. This applies to economic performance, as well as to general societal goals such as health and a sound environment. Given this, education and research need to be a key priority in our policy. I am therefore glad to say that the budget proposal presented to Parliament recently demonstrates a strong commitment to strengthening research in general, an to implement the so called Quality Reform in higher education.

The Forum also deals with our research, education and technology relations with Canada. This should not be forgotten. Many have pointed to the similarities between Norway and Canada, and see them as a good foundation for increased co-operation.

Research Excellence and co-operation

The current effort to strengthen research ties between North America and Norway will, hopefully, be of benefit to all parties involved. Although Norway is smaller also in terms of research volume, we have excellent research groups within a variety of sciences with whom American researchers should have a strong interest in co-operating. A few examples are:

• A recent international evaluation of Norwegian ICT research concludes that Norway has research groups of high international standards in several key areas.
• Norwegian mathematical research has recently received honourable grades by an international evaluation committee.
• 10 out of the 13 newly established Norwegian Centres of Excellence are within the fields that the Forum has singled out as focal areas for Norwegian – American collaboration.

The introduction of the Centres of Excellence Scheme is, in our view, an important step in our work to enhance quality in Norwegian research. I am also encouraged by the fact that as many as 130 research groups applied for Centre status and were generally given high ratings by an international scientific panel of experts.

The US and Canada are important to us for several reasons. They are among our most important export and import countries outside of the EU, as can be seen from this diagram, and are also of great importance in an education, research and technology context.

We have noted with interest that international pharmaceutical companies, like Amersham Health, have recently expressed an interest in establishing R&D-entities in Norway, due to what they consider to be the country’s high quality and relatively inexpensive research staff. Also within fields such as ICT, Norway can offer qualified and stable research staff—at an interesting price.

This is a feature of the Norwegian research landscape that might offer good opportunities for U.S. research-based companies, and which the Forum might help to highlight. In general, it will be useful to find areas where American and Norwegian researchers take mutual interest in advanced cooperation. The Forum might also offer opportunities for exploring such areas of interest.

In it’s business and industry related activities I believe the Forum should take note of the following:

The Forum should have a keen eye on business and industry challenges in Norway and our national strategies, and seek to elongate these into the US and Canada research and technology contexts.

The Forum should not duplicate the work done by our instruments of policy in North America, but rather complement their efforts in the fields of trade and technology co-operation.

Important research and technology activities in the US is distributed across the states, and is not centralised as in the EU. This implies a different focus for the Research and Technology Forum here than the Forum we have in Brussels. I believe a main ambition for the Forum in the US could be to establish meeting places and seek to enhance the dialogue between our business and industry and research and technology environments across the US, as well as in Canada.

Regarding the wider trans-Atlantic context, I believe the two Forums should also co-ordinate their activities when this is natural. There will among other things be new opportunities for collaboration through the 6 ^th> Framework Programme, offered by the separate agreement between the United States and the EU.

Major challenges in the Norwegian economy

Turning to the Norwegian economy, the government has identified several industrial policy challenges that need to be dealt with in a proper manner.

Our economy is strongly integrated with the rest of Europe. The coming enlargement of the EU is a key challenge for us, as it is of great importance that the European Economic Area is expanded in parallel. We also share challenges related to a single, European market with the rest of Europe in terms of increased competition, and seek to keep up with the transition to a knowledge-based EU-economy driven by the Lisbon strategy.

Still, this should not be an impediment to bilateral co-operation. International collaboration is not a zero-sum game. When excellence is the goal, business and industry, institutions and research groups will search for the best international partners, regardless of geography. In such a perspective, we have a strong focus on the possibilities for increased bilateral co-operation with the US and Canada.

Two challenges that are particular to the Norwegian economy is to keep growth in public budgets lower than growth in the mainland economy and secure increased public sector efficiency, and to obtain a reduction in state ownership in Norwegian industry in order to maximise value creation.

I believe the key challenge in the Norwegian economy is illustrated by this diagram. We face a substantial increase in old age and disability pensions in the years to come, and a reduction in government net cash-flow from petroleum activities. We therefore need to develop a more dynamic and innovative economy, including growth in non-petroleum business and industry.

Business and industry policy

In order to meet the challenges, we have a business and industry policy with three focus areas:

• a sound business environment
• a reduced state ownership
• a policy for growth and innovation

A sound business environment includes sound macro-economic policies, as these affects the competitiveness of our industry, a sound tax level that strengthens the economy’s business potential and a simplification of rules and regulations. We have already reduced the tax level for business and industry considerably, and are now dealing head on with rules and regulations.

A Policy for Growth and Innovation

Spending of oil revenues is discussed frequently in Norway. In discussing oil revenues, I do however believe it is important to bear in mind that the oil wealth only constitutes about 6 percent of our national wealth, whereas our human capital constitutes about 80 percent. I believe managers and politicians alike should focus more on our human capital, and less on oil revenues.

It is a goal for us to strengthen the role of innovation as a vehicle for growth and increased value creation. This takes people, competence and creativity. A key challenge is to strengthen the role of innovation and entrepreneurs in the formation of new enterprises.

The foundation seems good. Few countries spend as much on education as Norway. A large degree of the population has higher education, and we have a high percentage of women in the workforce. We are also in the process of reforming our higher education system. The main objective of the Quality Reform is to enhance the quality of both teaching and research. Internationali­sation is seen as a central tool to improve results.

We have for instance changed our system of academic degrees to make them comparable to international standards, thereby encouraging greater mobility. International student exchange is also one of the criteria in the result-based financing system introduced as part of the reform.

There are however clearly some important development lines to be discussed. The recent decline in the number of Norwegian students who receive parts or all of their education in the United States can partly be explained by the fact that U.S. fees are relatively high, partly by opportunities offered by mobility programmes in the EU, and partly by the fact that students take an interest in “new countries” such as Australia.

It has also proved difficult to attract American students to Norwegian institutions.

I look forward to discussing the consequences of such a development after the coffee break. A heretical question might be to ask if the dropping numbers are irrelevant, as long as the right students find there way to the US.

Norway also ranks high on penetration of new technology, as demonstrated by the fact that 58 percentage of the population have personally used the Internet, and that 77 percentage of the population have access to a mobile phone. The US and Canada has a little bit higher percentage of users of the Internet, but a much lower percentage of people with access to a mobile phone.

We do despite this not have a NOKIA, and do on the whole have few high-tech based companies. It should however be noticed that the major branches bases much of its activity on advanced research and development – for example within geology and petroleum technology, light metals and marine science.

Norwegian business and industry nevertheless have potential for improvement in putting high levels of knowledge and technology to commercial use. We should advance from our current ranking as number twelve among industrialised countries in number of patents granted to residents in the years to come.

In line with this, we see that high-technology exports as % of manufactured exports is relatively low in Norway. This is a challenge, not only because of the possible returns associated with bringing new and innovative products to international markets, but because feedback from international markets is a driver for further innovation.

In order to secure a more comprehensive innovation policy, the Government has now initiated a process with an aim to present an action plan on innovation next autumn.

Our policy for increased innovation has three main elements, all with regional, national and international dimensions:

1. We aim at creating a sound business environment for innovation.
2. We need good policies for education and research
3. We need selective instruments of policy that support innovation and growth

Picking winners is not a part of this governments innovation policy. Rather, we aim at creating a sound business environment so that innovation can take place across industries. Tax policy, the regulatory framework, labour market- and competition policies all promotes or inhibits innovation.

If we want to succeed in securing a higher level of knowledge in our production and processes, we need to keep an eye on the number of doctorates. Norway has fewer doctorates than the other Nordic countries measured as percentage of total population, but the share of natural scientific doctorates is higher in Norway than in the other Nordic countries.

I am glad to say that the budget proposal to Parliament includes substantially increased budgets for doctoral and post-doctoral scholarships.

Research and development policy is at the core of the governments innovation efforts. We currently rank as number 14 out of the 29 OECD countries in terms of R&D expenses as percentage of GDP. It is a general goal to reach the OECD-average, currently at 2,2 percent, by 2005. This is however a moving target, and may of course in itself not be a good measure of success. The proof of the pudding lies in the eating - in this case high value creation and a high standard of living.

Two main challenges that has to be addressed is the low proportion of industry-financed R&D relative to total R&D, and the low degree of R&D conducted in trade and industry itself. Much of the current R&D relevant to trade and industry is conducted in our research institutes, which is a rather large sector in Norway.

Key initiatives in our innovation efforts are:

a tax credit arrangement for the R&D efforts of businesses. This includes R&D services bought from foreign R&D institutions.

a change in laws in order to make the universities increase their collaboration with business and industry

an increase in the yearly contribution to the Norwegian Research Council

increased participation in international R&D co-operation, with a special focus on participation in the EU framework programmes

more resources to the universities and basic research, and more focus on quality.

The Norwegian government aims at increased institutional independence in higher education, also with regard to international co-operation. All co-operative mechanisms, including agreements, should be firmly anchored within the institutions. Personal networks will, however, remain the basis of our collaboration.

We have already taken steps towards strengthening basic research. The budget proposal includes a substantial increase in the financing of advanced scientific equipment at universities and colleges, as basic research is one of the main priorities in our research policies. This is not least due to the fact that high quality in our own research is an admission ticket to important international networks and increases our absorption capacity.

We give special attention to four priority areas in our strategic research at a national level. These are marine science, medical research, information and communication research and research on energy and environment. We see ICT, biotechnology and materials technology as generic and interdisciplinary, and instrumental in promoting the industry of tomorrow. They are also focal areas for the Forum.

New technologies is of course in general of interest to us. Functional genomics and nano-technology/new materials have also been singled out as priority areas. I have, incidentally, noted that nanotechnology/new materials is not listed among the focal areas of the Forum. Given its potential importance, and the fact that it is a priority area in American R&D policy, you might wish to reconsider.

Given the special importance of the American connection for Norwegian basic research, this ought to be a good basis for expanded co-operation across the Atlantic, also through the help of the Forum for Technology and Research.

Review of policy instruments

Before I close, I would like to say a few words about a review of our policy instruments initiated by this government. The result will be presented to Parliament next spring. A key goal here is to make the instruments more pointed towards innovation. The instruments will be pointed on the basis of a combination of focus areas and target groups with a potential for innovation.

Examples on focus areas are Research and Competence, new Ideas and Commercialisation and Internationalisation. Examples on target groups are entrepreneurs, young companies, innovation systems and SMEs with a potential for growth nationally and internationally.

The review could also lead to changes in the organisation of the instruments, but in this respect I must urge you to wait until spring 2003.

Conclusion

As I hope is clear from I’ve said, the Norwegian government puts great emphasis on strengthening research and on innovation. International co-operation is an integral part of our efforts. I am confident that the Forum will play an important role as a meeting place and catalyst in developing tighter bonds between institutions, research groups and business and industry in our three countries. Networks and partnerships give access to the knowledge, competence and technology necessary to increase innovation and value creation in Norway.

I wish you all the best in your future work.

Thanks for your attention!