7 The Development of the Norwegian Petroleum Innovation System: A Historical Overview

Abstract

This paper addresses the development of the Norwegian Petroleum Innovation System. The characteristics of the Norwegian Petroleum Innovation System were on the one hand the increasing ability to solve bottlenecks connected to production and operation on the Norwegian shelf, and on the other a gradual learning process which enabled a large portion of Norwegian participation in the petroleum business. While the initial phase of the petroleum development of Norway in the sixties was characterised by an absorptive capacity of receiving new technology, the building of Norwegian competence in the seventies and eighties was in certain respects directly shaped by public policy in order to participate. With the Condeep design it became possible to speak of an independent Norwegian petroleum industry. The development of Norwegian producer and supplier companies signified that petroleum activity in Norway was entering a new phase. In the R&D System of Norway petroleum education and research were introduced at several levels. Due to new cost efficient technologies introduced in the nineties, we may say that the adjustment was concluded by the beginning of 21 st century. The Norwegian oil and gas actors perceived themselves ready to fully participate in the international system of energy producers.

The evolution of Norway's national innovation system

“…Although Norway's oil and gas sector accounts for a small share of national employment, the sector's development opened up a huge market that Norwegian manufacturing and services firms successfully exploited, partly as a result of public policy. Firms in sectors such as shipbuilding, engineering, ICT and other business services expanded their sales in this rapidly expanding market, aided by supportive governmental policies (see Engen, 2009). In the Netherlands, another small open economy, oil and gas production was associated with de-industrialization, the so-called 'Dutch disease', resulting from the appreciation of its currency a loss in competitiveness within domestic manufacturing.…”

“…The competences created by these policies in ICT technology, however, produced payoffs in other parts of the economy, particularly in the rapidly expanding oil and gas industry (Engen, 2009;Sogner, 2009). Hence, instead of substituting for resource-based industries, as the 'modernizers' envisaged, their efforts instead strengthened innovation and competitiveness within the resource-based sector.…”

“…The Norwegian oil and gas industry faced daunting challenges in producing oil and gas under conditions of unprecedented complexity and hazardousness, and developed new technological and organizational solutions (e.g. the CONDEEP platforms; see Engen, 2009). The Norwegian fish-farming industry also relied on a stream of important innovations in fish farming, processing, and disease control.…”

“…These laws were originally drafted to create a framework for national control of natural resources, specifically, hydroelectric power, and influenced the early years of Norway's aluminium industry (Moen, 2009). But as Engen (2009) notes, this regulatory heritage also influenced the development of Norway's offshore oil and gas sector more than half a century later. The technological and organizational development of the Norwegian oil and gas industry might well have followed a very different path that more closely resembled that in the offshore oil and gas industries in Denmark and the United Kingdom in the absence of the regulatory system created during the early 20th century for an entirely different sector.…”

Uncovering Norway’s regional disparities with respect to natural riches

“…Various firms started to engage in oil and gas related business along with the state-owned company, Statoil. As such, the oil sector has become a challenge for the previously existing Norwegian industrial sectors in a way to boost innovation and transmit new technologies (Engen 2007). Besides, in line with environmental and social concerns, oil and gas extraction has accompanied complementary policies to ensure intergenerational equality.…”