Norway Essay ⋆ Business Essay Examples ⋆ EssayEmpire

With its long coastline and mountainous geography, Norway has long traditions of natural resources extraction. The Organisation for Economic Co-operation and Development (OECD) has characterized Norway as a paradox, because it ranks low in terms of average innovation outcome but it performs well regarding the economy and standard of living, including extensive public funding of welfare services. The country’s population was 4.7 million as of 2008.

Norway’s geography facilitated an industrialization process that relied on natural resources such as timber, fisheries, and shipping in the late 19th century. After having been a part of first Denmark (1536–1814) and then Sweden (1814–1905), Norway’s 1905–20 period showed several initiatives for colocating heavy industry and power plants at large waterfalls. During the German occupation in World War II, numerous projects related to railways, energy, and heavy industry were started, and many of these projects were completed after the war. The postwar government furthermore initiated extensive public programs for regional planning and industrial development. From 1974 to 1992, the service sector experienced considerable growth.

Within manufacturing and mining, the most important natural resources sectors besides fisheries and aquaculture are the sectors centered on oil and gas extraction, which developed from the early 1970s onward. By the beginning of the 21st century, oil and gas extraction accounted for approximately a quarter of gross domestic product, and in terms of all export revenues, it accounted for 42.5 percent. Oil and gas extraction has increasingly been supported by adjoining sectors specializing in high-technology supply ships, finance engineering, and other supplies, where several specialized Norwegian firms are at the international forefront. After the discovery of oil resources in 1969, Norway ran a countercyclical financial policy during the 1970s. Thus, economic growth was higher and unemployment lower than for most other Western countries. In the early 2000s, much of the policy debate in Norway has focused on how the economy should be turned in other directions than the heavy emphasis on oil and gas extraction. The historian Ola Grytten, for example, claims that Norway, despite its wealth, has lost competitive power because past policy focused on subsidies and Norwegian firms adapted to domestic policies rather than to market trends.

Norway is also known as one of the prime examples of social policies for wealth distribution and intergender equality. Social insurance was gradually implemented, starting with accident insurance for factory workers (1895) and later expanding into also covering other occupational groups and types of insurance, including old age pensions (1936), unemployment insurance (1939), disability insurance (1960), and welfare benefits for widows and single mothers (1964). Postwar reforms focusing on families and the labor force participation of females include maternity leave (1956), separate taxation for married couples (1959), a day care act (1975), working environment act (1977), parental leave act (1978), and equal status act (1978). In the early 2000s, the governing parties initiated reform measures aimed at extending optimal participation in the labor market to previously marginalized persons by integrating labor market and welfare-related programs, including an abolition of strict cognitive and organizational division between these two areas of social security policy.

Norwegian politics has maintained a balance between overall taxation levels and implementation of social security programs and instability, especially in recent years when it comes from gaining a left vs. conservative majority in the parliament. Main political issues include concrete funding of the welfare state and the relationship to the European Union (EU). The Labor Party and its allies strive to uphold a high level of public funding and responsibility of welfare programs and hence argue for continued high levels of income and corporate taxes, supplemented with a modest consumption of the state Petroleum Fund created from oil revenues. The conservative parties agree on the basic principles of the welfare state, but argue for lower taxation levels supplemented with selective privatization programs. In addition, the liberal Progress Party has a competing view in arguing for more drastic privatization and consumption of Petroleum Fund assets. It achieved about 25–30 percent of the votes in popular polls as of 2008, that is, about the same level as the Labor Party, albeit hitherto failing to achieve sole or coalition government formation. Norway continues to be a nonmember of the EU following public referendums in 1972 and 1994. The issue continues to be a focus for political debate; however, the actual EU linkages are to a certain degree upheld through the country’s membership in the European Economic Area, which permits Norway to participate in the EU internal market.

Bibliography:

Charles Edquist and Leif Hommen, , Small Country Innovation Systems: Globalization, Change and Policy in Asia and Europe (Cheltenham, 2008);
Jan Fagerberg, David C. Mowery, and Bart Verspagen, Innovation, Path Dependency and Policy: The Norwegian Case (Oxford University Press, 2008);
Kjetil Fretheim, Rights and Riches: Exploring the Moral Discourse of Norwegian Development Aid (Peter Lang, 2008);
Ola Honningdal Grytten, “The Economic History of Norway,” in EH.Net Encyclopedia, R. Whaples, ed., eh.net/encyclopedia (cited March 2009);
Knut Halvorsen, Work, Oil and Welfare: The Welfare State in Norway (Universitetsforlaget, 2008);
Organisation for Economic Co-operation and Development, Economic Survey Norway 2004 (OECD, 2004);
Organisation for Economic Co-operation and Development, Norway (OECD, 2008);
Wayne C. Thompson, Nordic, Central, and Southeastern Europe, 2008 (Stryker-Post Publications, 2008).

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