The oil gas cluster in norway 3 2 norways economic

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Unformatted text preview: The population density is only 40 people per square mile (Statistics Norway, 2012). Social equality is high, with a Gini Coefficient of 0.25, below the OECD mean of 0.31, mainly due to centralized wage negotiations and in kind transfers (education, healthcare, social services) from a generous welfare state (OECD, 2012). The oil & gas cluster in Norway 3 2. Norway’s economic performance Fuelled in particular by revenues from petroleum production, which started in the beginning of the 1970s, Norway’s GDP per capita increased fivefold in nominal terms from $9,551 in 1980 and to $56,648 in 2010, which is the second highest in OECD (OECD, 2012). As seen in Figure 2, even excluding petroleum, which constitutes 23% of the economy, Norway’s GDP per capita would be just behind the United States and Switzerland. The total 2010 GDP of $277 billion—1.75% of the American economy—made Norway the world’s 23rd largest economy (World Bank, 2011). Manufacturing only accounts for 9% of the economy, a smaller share than in peer countries (Statistics Norway, 2012). Living costs are high; domestic purchasing power is only 67% of the United States. The oil & gas cluster in Norway 4 In 2010, labor utilization was 75.3% in the 15 ­64 age bracket, compared to an EU average of 64.2%. The gap between Norway and the EU is higher for women (73.3% vs. 58.2%) (Eurostat, 2011). However, as seen in Figure 3, the average annual hours worked is 1,414, significantly lower than the OECD average of 1,749 (OECD, 2010). Unemployment has been consistently low for years and is now 3.2% (Statistics Norway, 2012). Why has Norway done so well over the last twenty years? A key question is why Norway has experienced sustained growth...
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