Norway: the road to a sustainable economy

Anita Krohn Traaseth, former chief executive of Hewlett-Packard Norway, poses for a picture in Oslo September 8, 2014. Part memoir, part reflection on business life, "Good Enough for the Bastards" is a bestseller by Traaseth, encouraging women to reach for the top jobs. The book took Norway by storm this year, selling 16,000 copies in a country where a non-fiction book is considered a hit if it breaks through the 800 mark. Picture taken September 8, 2014. REUTERS/Gwladys Fouche (NORWAY - Tags: SOCIETY PORTRAIT)

If forewarned is forearmed, Norway has a pretty big arsenal.

Oil discovery in the 1960s made the country one of the richest in the world with high wages and free education. In fact, it is still very much a part of the oil age with about 70 per cent of its exports being hydrocarbons.

But pegging the fortunes of a welfare state on the vagaries of the oil market is a high-risk proposition, and the question on everyone’s mind is ‘what do we do after the oil’? Sure, the country has a huge savings from oil money invested in the world markets, but what is a trillion dollar these days — an ageing population heavily dependent on pensions and social support means there is a constant drain on the assets.

The quest for an alternative economy has occupied the top business and political leadership of Norway for many years and one of the solutions that have been put in place is Innovation Norway, an organisation that acts as a trade council, a business incubator, angel investor and promoter rolled into one. Formed in 2004, the state-owned company spearheads the government’s efforts to transition to a diversified economy that is stable and green. Not an easy task when the country is chest deep in an industry that produces the world’s worst pollutant.

Anita Krohn Traaseth, who took over as CEO of Innovation Norway in September, is quite aware of the challenge. “We as a people don’t feel enough pain yet because we still have a very healthy economy,” she told The Hindu in Oslo recently. “And going through this transition — moving on from being a pure, vulnerable oil-and-gas economy to a sustainable, renewable or you can call it bio economy — when we don’t feel enough pain, is a challenge.”

How Innovation Norway helps the country

On the bright side, there is no lack of awareness among Norwegians on the need for a transition to a renewable, sustainable economy, she said. The transition is being seen as an opportunity to revive Norway’s traditional industries such as agriculture and fisheries and the sector that formed the backbone for oil exploration, shipping.

Innovation Norway swallows some of the risks of this transition. It identifies the companies and industries that need to be invested in or need to be helped during the change. “It cannot be driven by the market alone as it is too early,” said Ms. Traaseth. It has handheld all sorts of industries, from wind farm clusters to innovative oil exploration technologies, claiming to have delivered for these entrepreneurs a growth 21 percentage points higher than comparable ventures.

It is also the funnel through which the government pours money into the transition — funding start-ups as well as realignment of existing industries. The Ministry of Trade, Industry and Fisheries and other stakeholders in the company, including county municipalities, poured nearly half a billion dollars into the transition process in 2013 through this vehicle.

To expand presence in India

Innovation Norway is also the Norwegian government’s official trade representative abroad, and has offices in over 30 countries including in India, in New Delhi.

Ms. Traaseth made clear Norway’s interest in the opportunities that India offers in the transition. But she also pointed to the need for Norway to be ‘very humble’ while approaching India “because it is obvious that the Indian market is interesting for Norway. [But] it is not that obvious to India what specific knowledge from Norway can be useful in developing India 2.0.”

Information and communication technology, she said, was one possible area of cooperation. Norway has one of the greatest research environments in the field but not much commercialisation like in India. “There is lot to learn from each other here.” India could also draw on Norway’s tradition and expertise when it comes to hydropower and waste management, she added.

She saw the Modi government’s ‘red tape to red carpet’ statement as good signal for Norway. “Defining what the red carpet means and how they are going to make it possible will help us,” she said.

Innovation Norway is also looking to expand its presence in India with an entrepreneurship programme in 2015.

(The writer was in Norway recently at the invitation of the Norwegian government.)