Economic situation

Having the world`s second highest GDP per capita is a good starting point. However, like all industrialised countries, Norway is facing new challenges due to the process of globalisation.

A country where wage costs are high, it is easier for Norway to compete in business areas where these can be tolerated as opposed to areas where labour-intensive production is required. Norway has a highly competent workforce but efforts within innovation, research and development are comparitively low. In addition, Norway`s substantial income from its petroleum-based economy means that necessary reforms in the public and private sectors to increase efficiency and productivity are less visible and easily postponed.

Unemployment in Norway is very low. The labour market is tight and in the future Norway will need more qualified people to join the labour force. With an economy in danger of over-heating (e.g with an aging population, the pension and welfare fund is now estimated at three times that of the value of the oil fund), a strict fiscal policy that limits investments is therefore key.

Norwegian business is greatly affected by EU policies and regulations. As part of the EEA, most Norwegian industries participate in the Internal Market which is the target of approximately 80 per cent of Norwegian exports.