Innovation in Norway in a European Perspective

This paper investigates sectoral patterns of innovation in Norway in a European perspective. It puts forward a theoretical framework based on a new sectoral taxonomy that combines manufacturing and services within the same framework. It then analyses innovative activities in Norway and compare them to other European countries by making use of data from the Fourth Community Innovation Survey (CIS4). Finally, it studies the recent evolution and current characteristics of the industrial structure in Norway and points out its peculiarities vis-a-vis other European economies. The results of this work point to a contrasting pattern. On the one hand, Norwegian sectoral systems appear to be very innovative, often above the European average and, for some of the CIS4 indicators and some of the sectoral groups, they indeed emerge as the most innovative in Europe. On the other hand, these high-tech sectoral groups are relatively small in Norway, accounting for a much lower share of production than their European counterparts. The comparative analysis enables a reassessment of the so-called Norwegian paradox. The problem is not with innovative activities, as frequently asserted, but it has rather to do with the sectoral composition of the economy.