Norway is rich in renewable power, but needs to move away from oil exports ©Getty Images
Norway is rich in renewable power, but needs to move away from oil exports ©Getty Images

In the spotlight: Norway

Supply Management goes globe trotting to evaluate the procurement potential of countries around the world…

POPULATION 5.29m

AREA 385,203 km2 (land and fresh water)

THE HELICOPTER VIEW With high wages, a  vibrant private sector and strong welfare system, Norway was named the world’s most inclusive economy last year by the World Economic Forum. Rich in natural resources, it has 98% renewable electricity largely through hydro plus some wind power.

ECONOMIC OUTLOOK It’s not all rosy. Norway’s economy depends on oil and gas exports, and is just starting to recover from a two-year downturn caused by the crude-oil price slump. The IMF estimated growth to be 1.4% last year. This is forecast to rise to 1.6% by 2018. But the need to diversify is becoming urgent.

BIGGEST INVESTORS Neighbour Sweden leads the way, accounting for 19% of FDI in 2015. The Netherlands came second with 12%. Almost half (46.9%) of incoming FDI went to oil extraction and mining.

SUPPLY CHAIN ISSUES Norway lost its ‘most resilient supply chain’ crown – according to the FM Global Resilience Index – in 2016. It has now slipped to sixth place, losing marks for infrastructure and local suppliers.

STRENGTHS There is a highly skilled labour force in Norway, a well-organised public sector and relatively reliable infrastructure.

CHALLENGES Isolated areas make transport and logistics costly. Norway is past peak oil, and diversifying into tech has had limited success. Productivity is comparatively low.

BOTTOM LINE Oil is still king, and this must change. While there has been some progress in rebalancing the economy, structural reform is needed alongside improved productivity and higher-quality employment opportunities if the country is to unshackle itself from the influence of oil prices.

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