Suppliers have been able to grow their revenues

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Unformatted text preview: ign operators had to come up with plans to develop the competences of the local suppliers. The Norwegian government subsidized the The oil & gas cluster in Norway 18 local development costs with tax deductions. This is another distinguishing feature of the Norwegian policy model (Heum, 2008). There were location ­based directives to keep R&D activities in Norway. In the 4th licensing round in 1978 ­1979, authorities introduced a requirement that at least 50% of R&D necessary to develop a field had to take place in Norwegian institutions. Later this 50% requirement was replaced with “goodwill agreements” under which foreign operators had to make an effort to conduct as much oil and gas R&D in Norway as possible. However, these protectionist policies only targeted industries where Norway was already world class (e.g. shipping but not steel) (Heum, 2008). These policies were removed as Norwegian firms developed competences and were phased out in 1994, when Norway entered into a free trade agreement with the EU, which prohibited these practices. Oil and Gas Supplier Cluster Performance The oil and gas suppliers in Norway have enjoyed phenomenal growth over the past few years. Employment in the supplier industry has grown from 59,000 in 1990 to 114,000 in 2009, while employment by operators (customers for the suppliers) has stayed relatively flat over the same period at around 20,000 (Sasson, 2011). Most of the employment is concentrated in the South and West, particularly in Rogaland County (see Figure 15). Supplier sales totaled $52 billion in 2010, having grown more than 51% from 2006. The The oil & gas cluster in Norway 19 employment growth rate (30%) since 2006 has been significantly slower than revenue growth, due to Norwegian labor c...
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