There is also the related concept of "Dutch Disease" (http://en.wikipedia.org/wiki/Dutch_disease) which is what I expected this would be about. The idea is that once a country discovers it has reserves of a valuable natural resource, it tends to exploit and build its economy around that resource, at the expense of its more complex sectors like manufacturing. Norway seems to have handled that decently well so far, and part of the lack of spending probably comes from the fact that they realize their oil's a short term freebie boost not an economic strategy.
Norway do suffer from a mild form of Dutch disease unfortunately.
The oil industry dominate new investment. Although a lot of that is high tech solutions and can probably be used in other sectors, especially in related areas such as marine and shipping solutions, but they do not invest very well in any other area.
Some new companies are successful (Fast,Trolltech,Kongsberg,etc) but it is more in spite of the investment available. The VC, general investment and interest is barren if you compare the buoyant start up market in Denmark, Sweden and Finland.
I am worried about the state of affairs in 20-30 years if they not e.g. follow Finland's post Nokia incubation assistance etc.
(IMHO as a Norwegian living in the UK).
I know a lot of people talk up Norway, but I'm not aware of anything that Norway does economically that matters outside of energy production.
What great technology, companies, etc. have they produced in the last 40 years? What big innovations come out of Norway? Do they have the top universities in the world?
They've only won two nobel prizes since oil became the center of their economy, and they became rich. They won four in the 1920s, and four between 1968 and 1973. The oil wealth sure doesn't seem to have spurred great knowledge acquisition.
On a more serious note, we're only like 5 mill people,
and while we don't rock the nobel prices I think the oil has pushed us more towards engineering than theoretical research (for better or worse..).
Agree our Universities should be better than they are - it's apparently hard to get funding for something that isn't directly applicable to oil, subsea or salmon.
But you probably use lots of stuff designed/invented in Norway without knowing.
Example: Do you use a GSM phone? GSM was invented at a Norwegian University.
Lots of research for subsea-technology, oh, and we're pretty good at ship design stuff - dating back from the viking age until now (x-bow).
Techy stuff: Energy Micro, Nordic Semiconductors, some parts of Atmel, Opera, FAST, etc.
Most of the oil welfare fund is invested abroad - all over the world (reduces risk and avoids inflation), these days heavily geared towards green technologies / energy.
Didn't know GSM was controversial, that's very interesting, wonder what happened there.
But still, I bet you interact with gadgets powered by tech from Norway on a daily basis, even if we remove GSM from the equation: the Atmel AVR micros, radios and micros from Nordic Semiconductor, Energy Micro and Chipcon, etc. Maybe you also touch a UI built on QT (Trolltech), even though the QT phones never became a success. :)
Norway has five million people, but I would assume outsized results given the claims about the quality of the country courtesy of the immaculate welfare state and the money available for education. Being entirely serious.
My primary comparison is that, since the oil boom, their results have fallen off in nobel prizes, not significantly increased. And those two prizes they won in the last 40 years were for economics (they were winning them for chemistry and physics in the '60s / '70s).
Ireland has won five since 1974, they only have 4.5 million people, and no grand oil boom, and have only recently become well-off.
Denmark has 5.5 million people and have won four nobel prizes in those 40 years, for chemistry, physics, and physiology.
My point is: where are the results outside of energy production? We should be seeing amazing innovations, great technology, and big technology exports, incredible global contributions to science and break-throughs in medicine. I should be using phones designed by Norway, and software designed in Norway.
So where is it? There is absolutely no question Norway has created a high quality of life courtesy of the money from the oil boom, but what else have they done with it other than provide lots of money to live well (ie what do you have to show for it if the oil is gone in ten years)?
