Innovation by co-evolution in natural resource industries: The Norwegian experience

Abstract

Some resource-based economies become wealthy while others stay poor and Norway belongs to the first category. This paper argues that part of the answer to why Norway has managed to benefit from its rich natural resources is found in the formation of a well-functioning national innovation system. The paper integrates the innovation system approach with a historical approach through the concept of co-evolution. The empirical study investigates how innovation systems evolve in natural resource industries through analysing the co-evolution between industry, knowledge organisations and national policy in the Norwegian aluminium and petroleum sectors. Parallels are found in the development of these two sectors, which are: i) the deliberate use of concession laws to seize value creation and technological development from foreign direct investments, ii) the establishment and prioritisation of state-owned companies and iii) the more or less intentional formation of a national innovation system. The paper points to the relevance of analysing the historical evolution of national innovation systems to understand the creation of their specific path-dependent characteristics, to analyse how policy influences the creation and working of innovation systems, to use a multilevel approach in studies of innovation systems and to consider how innovation processes in different industries are linked in value chains and through knowledge flows.2

Same Sea, Different Ponds: Cross-Sectorial Knowledge Spillovers in the North Sea

“…The floating OW foundation concept developed by WindSea (specialised OW) is a semi-submersible platform developed on the basis of extensive experience with FPSO (floating production, storage and offloading) structures and offshore O&G and renewables engineering from mother firms Force and NLI (both O&G supply firms). From Force, Windsea comprises a Norwegian and a Danish branch, and the manager explains that "our idea was to interbreed the Norwegian offshore competence with the Danish wind competence", likening it to how the Norwegian offshore O&G industry itself developed as O&G capabilities from abroad and Norwegian maritime experience merged in the 1970s (Saether, Isaksen and Karlsen 2011).…”

Uncovering Norway’s regional disparities with respect to natural riches

“…Innovation systems are constructed to exploit offshore oil and gas, attaching roles to different actors such as Statoil -the national oil company -foreign petroleum companies, research bodies, and the Petroleum Directorate (Saether et al 2011). The key points in improving these innovation systems have been first, the flow of knowledge from non-resource sectors to resource-based industries and second, technology transfer from foreign sources (Fagerberg et al 2009).…”

“…Nevertheless, the efficiency of these systems depends on the operation of the institutional framework, which is also favorable in Norway. Saether et al (2011) put forward the idea that the shift of labor and capital towards resource extraction, such as minerals, oil, and gas, stimulates better-educated workers, when higher wages are offered in the extractive sector.…”

Technology Gap and Catching up in Economies Based on Natural Resources: The Case of Chile

“…Since capital and technology are not enough to achieve a permanent successful result of NR exploitation, due to the problems of deindustrialization, depletion, corruption, and social conflicts, it is grounded in the related literature on NR that institutions are also an essential factor to avoid NR curse and turn it into a blessing [2], [8], [31], [43], [59], [64], [65]. The institution's index of Chile presents a lower value (weaker institutions) than leader, but the difference between Australia and Chile is only around 10% with a decreasing trend, while with Canada or USA is significant lower.…”