Business and industry in Norway - The structure of the Norwegian economy

Source: Statistics Norway

Export trends over the past 20 years

All of Norway’s industries have increased their exports over the past 20 years - by a total of 270 per cent. The petroleum industry is currently the most important export sector, accounting for 46 per cent of Norway’s export revenues. This is followed by the manufacturing industry, with around 30 per cent, and the services industry, with around 20 per cent. This picture was very different in 1980. Service industries then accounted for 34 per cent of the Norwegian export figures. More than two-thirds of these were linked to the shipping industry, but this share has been cut to around 50 per cent over the past few years. The traditional manufacturing industry accounted for 33 per cent of the export revenues and the petroleum sector for 28 per cent in 1980. The primary industries did not export much at that time, but, as a result of the increased export of Norwegian fish, they now account for 2 per cent of the export figures. Processed fish and fish products are classified as industrial products.

Export trends from 1980-2000, divided into main industries (fixed 12000 prices)

Source: Statistics Norway

Main export goods

Norway’s major export products are gas and oil, which have an export value of more than NOK 312 billion, or 46 per cent of the country’s total exports in 2000. Machinery and means of transport manufactured by the mechanical-engineering industry contribute around NOK 49 billion to Norway’s export revenues. This includes large power and office machinery as well as telecommunications and computer equipment. Ship exports provide around 25 per cent of the export value of this section of the mechanical-engineering industry.

Norway exports fish and fish products worth approximately NOK 28 billion - 5 per cent of Norway’s total goods export. Chemical products to a value of NOK 22 billion are exported, covering everything from medicines and pharmaceutical products to chemical fertiliser and plastics raw materials. Aluminium, ferro-alloys and other metals exports are worth almost NOK 40 billion. The percentage-wise distribution between the sectors in the figure and the relative importance of individual goods may vary slightly from year to year, depending on the oil prices.

Source: Statistics Norway (exports by type of goods, two-digit SITC)

Direct investments in companies in Norway/abroad - expansion abroad

Foreign capital and foreign direct investments in Norwegian companies have been of great significance to the growth of Norwegian industry. The figure below shows that Norwegian investments in foreign companies are now greater than foreign investments in Norwegian industry. Prior to 1994, the situation was the opposite. Norwegian investments abroad have risen strongly over the past decade, and a significant amount of the expansion that has occurred has taken place there. Direct investments have primarily been in the manufacturing industry, and the reasons given for them are often the desire to have access and proximity to new markets, access to knowledge and technology, and access to and the ability to utilise natural resources and reasonably priced labour. A survey conducted by SNF of a selection of Norwegian companies’ activities abroad in 1996 showed that the largest Norwegian companies had 150 000 employees in their subsidiaries abroad (43 per cent of all the companies’ total employees). This is equivalent to around 40 per cent of those employed in manufacturing goods in Norway (with the exception of agriculture). Seventy-six per cent of these companies’ total revenues came from outside Norway.

Source: Norges Bank

Value creation over the past 20 years

The gross domestic product, or GDP is a measure of the value creation in all the goods and services produced by a country in the space of a year. In 2000, Norway’s total GDP came to NOK 1 424 billion. The private-services sector accounts for 40 per cent of Norway’s GDP, making it the highest contributor. The number employed in the service industries has also grown by 230 000 since 1980. The increase in those employed in business services has been all of 240 per cent.

The manufacturing industry accounts for around 9 per cent of the GDP of mainland Norway. The number of people employed in this sector was falling at the beginning of the 1980s, and was around 300 000 in 2000. The estimated value creation in general government currently comprises around 14 per cent of the GDP. Since 1980 and up to the present day, the number of people employed in general government has increased by 250 000, with more than 90 per cent of this growth taking place in local-authority administration. The primary industries account for around 2 per cent of Norway’s GDP. Private services and oil production have been the most important contributors to the growth in GDP over the past 20 years, while the value creation in the manufacturing and construction industries has mainly remained stable throughout this period.

Development in GDP by industry, 1980-2000 (fixed 2000 prices)

Source: Statistics Norway

The employment structure in industry

The figure below shows Norwegian industry’s employment structure. Oil production, mining and quarrying are capital-intensive industries, with most employees working in major companies. Of a total of 23 000 employees, more than 17 000 were employed in companies that had staffs of at least 100. In the manufacturing industry, around 65 per cent, or just over 190 000 people, work in companies with more than 50 employees. The structure does, however, vary between the different industrial sectors. Most employees in the metals, pulp and paper, chemicals and petroleum industries work in large companies, while there are many small companies in the textile and ready-made clothing, wood-products, mechanical-engineering and graphic industries.

Of just under 6,500 employees in the fisheries industry, 95 per cent work in companies that have fewer than 50 employees. The wholesale and retail trades are extremely dominated by small businesses, and almost 270 000 employees work in companies that have fewer than 50 employees. However, small companies can be seen to play a considerably less dominant role in the wholesale and retail trades if the fact that many small companies form part of various types of large chains is taken into account.

Source: Statistics Norway, Register of Companies and Business Enterprises

Some key bodies in the industrial-policy system

The Norwegian Industrial and Regional Development Fund (SND) has, since its formation on 1 January 1993, been an important source of financing for small and medium-sized companies. The SND is the authorities’ key body in the field of industrial and regional development, and focuses on small and medium-sized companies, new companies, competence-increasing measures and female participation in industry, among other things.

The Research Council of Norway (NFR) administers almost NOK 3 billion for research purposes, provides advice on research-policy questions and creates meeting places for researchers and users of research. The objectives of the Research Council are to promote basic and applied research in all professional fields, increase society’s level of knowledge and promote creativity in all sectors and industries.

The Norwegian Trade Council is intended to be Norway’s national centre of expertise on exports, internationalisation and technological collaboration. Norwegian Industrial Attachés (Norges Industriattachéer) were incorporated into the Norwegian Trade Council as from 1999.

The Norwegian Tourist Board is a commercial foundation established in collaboration between the Norwegian government and the travel industries in Norway. This foundation is intended to be a national, professional marketing body for the Norwegian travel industries, and must, through its work, contribute to stimulating and strengthening the travel industries’ overall profitability and competitive ability.

The Norwegian Guarantee Institute for Export Credits (GIEK) is the main government body for providing guarantees and insuring export credits. Its main goal is to promote the export of Norwegian goods and services and Norwegian investments abroad.