Norway takes its start-up message to Texas
Crown prince tells SXSW festival how to ‘innovate the Nordic way’
Crown prince Haakon Magnus of Norway speaks on stage during the SXSW festival in Austin, Texas. Photograph: Rick Kern/WireImage
Norway’s reputation as a new international tech hub is not manufactured. But it isn’t necessarily organic either. With the second-highest GDP in the world, the Norwegian economy is cushioned by formidable old and gas reserves, a reality it exports.
While language and a skilled workforce play their part in Ireland’s success at attracting investment from the tech sector, it’s the “Blessed Eighth”, aka our 12.5 per cent corporate tax rate, that makes all the difference. At 24 per cent, Norway’s levy isn’t their carrot on a stick. But then Norway is somewhat new to looking for investment from elsewhere.
“Well, firstly, the companies need to be attractive to us,” says director of entrepreneurs and start-ups at Innovation Norway, Pål Thorvik Næss. “We haven’t tried to attract much inward investment until recently. That’s why Haakon, crown prince of Norway, came to SXSW [the South by Southwest festival in Austin, Texas].” To promote Norway on the international stage.
On the governmental side, just like we have Enterprise Ireland and the IDA, Norway has similar schemes for tech, where the State will match private investment, and other such initiatives.
The Norwegian delegation at SXSW is keen to emphasise how the country’s indigenous tech companies are focused on solving real problems. “We have a lot of activity in the edutech and health tech spaces,” the crown prince told The Irish Times.
Blockchain technology is also growing there. Norwegian company Diwala is using blockchain to help facilitate refugees connect with NGOs, prove their identity and connect with their own communities. “We’re focused on real problems and trying to provide solutions to make the world a better place,” the prince says.
While it is far more common to hear about the Nordic model in the context of best practice for education, healthcare, social welfare systems, etc, it has been the subject of increasing negative press in recent times on account of its hypocritical position on climate change.
Norway has been one of the most successful nations at reducing its own carbon footprint. For example, the government offers several, very attractive incentives for buying electric cars, including the waiving of high taxes imposed on the sale of other cars, the use of bus lanes by “our friends electric” and free access to toll roads. It hopes only electric cars will be sold in the country by 2025, making it an increasingly attractive place for battery companies to locate.
This success, however, comes at a price to the rest of us: Norway remains one of the world’s largest oil exporters. (According to the Norwegian petroleum directorate, emissions from Norway’s oil exports are 10 times greater then its domestic carbon emissions.)
There’s a clear desire to diversify, or distract from, a “green economy” propped up by the sale of fossil fuels abroad. Oil and gas account for well over a third of Norwegian exports and about 12 per cent of GDP and, as Norwegian giant Statoil is actively competing with rival Russian and American companies for new prospects in the shallow waters of the Arctic, there’s no sign the country is ready to practise abroad what it preaches at home any time soon.
Still, with several decades of experience in a sector as high tech as offshore drilling, many Norwegians have unique skill sets that could be used to innovate in other ways.
“A lot of the competency required for developing technology in Norway’s newer enterprises came from the oil and gas sector,” he says. “We’ve been in that industry for decades and we are experts in offshore technology, one of our greatest assets.
“The ocean surrounds us and is something quite close to all Norwegians. It’s only natural that a lot of tech ideas are linked to the sea. We are seeing many people coming from an oil and gas background who want to use their skills in completely different ways to help solve real-world problems.”
Boston or Bergen?
In the United States, where the social democratic approach so common in northern Europe is frequently dismissed as communism with a different name, The Irish Times was keen to learn how the prince’s central mantra at SXSW – innovate the Nordic way: solve real problems – was being received locally.
“Our welfare system makes it less risky to start your own company. Even if it fails, you’ll be able to keep your home, continue to have healthcare, send your kids to school. This provides security.”
Security can, arguably, breed apathy, according to the libertarian in all of us. Not so, says the crown prince. “Last year, 60,000 new companies were set up in Norway. That’s more than we had babies born.” An unusual comparison to use but whatever.
“Scandinavia as a whole is comprised of countries with well-functioning economies: taken together, it is the 12th-largest economy in the world. Fifty per cent of Europe’s unicorns come from the region. So we’re doing something right,” he says. “Our way of setting up a society is efficient and good for business as well.”
Given the built-in wealth generated from its rich supply of natural resources, not to mention relative cultural homogeneity, is it possible for any other country, without such characteristics, to innovate the Nordic way?
“A lot of people say that Norway is rich because of oil and gas. Firstly, no one is rich because of oil and gas. People need to be competent and have the ability to manage its value responsibly in order to take advantage of it. It’s always about people. The true success of Norway has been about policy and mindset.”
He has a point. Had Ireland’s formidable supply of natural resources off the west coast been managed more responsibly by political leadership, perhaps it would be Scandinavians that were sick of hearing about the “Irish model”, and not the other way around.
“Besides, if we didn’t have oil and gas, we’d still be doing really well. Just look at Sweden. ”
The confident, albeit debatable, logic for this argument stems from the similarities between Norway and its closest neighbour. “We’re very similar to Sweden but they do not have oil and gas and are still a very successful industrial nation. Sure we’ve had this fantastic revenue coming in from oil. Sweden has not and yet it has been able to produce all these fantastic international companies. Our companies have been in the petroleum sector since the 1970s but now our economy is diversifying really quickly. People are looking at completely new areas of tech and solving real-world problems.”