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Unformatted text preview: above the OECD ­ average over the last twenty years even in the non ­petroleum part of the economy. Norway tops the productivity ranking in the OECD (OECD, 2008). Between 1973 and 2006, Norway was the only OECD country with higher GDP growth per capita than the United States. In 2011, GDP per hour worked was 28% above the US level; discounting the petroleum sector, Norway would be on par with the productivity of the United States, as shown in Figure 4. This might be driven by firms continuously introducing new technology due to the strong incentives to upgrade productivity per worker, since labor is expensive (Norwegian Ministry of Finance, 2009). In addition, Norway’s growth can be attributed to the tertiary sector expanding more rapidly than the primary and secondary sectors. Since 2000, education, real estate, financial services, oil and gas services and construction have enjoyed average annual growth rates between 3.5% and 5.5%, whereas manufacturing, fishing and agriculture only grew between 1.5% and 3.5% per year (Statistics Norway, 2012). This shift towards the tertiary sector may have shielded Norway from low ­cost manufacturing competition, in particular from China. Furthermore, the structure of the Norwegian economy has helped The oil & gas cluster in Norway 5 Norway sharply improve its terms of trade. Between 1991 and 2011, prices of Norwegian export goods increased 85% more than prices on Norwegian import goods. Excluding petroleum, this figure would be 20% (Statistics Norway, 2012). 3. Competitiveness Analysis of Norway Endowments Norway has rich endowments of fish, timber and minerals, in addition to petroleum. Domestic electricity supply is almost 100% hydroelectric power. Winter conditions are harsh, and the terrain is rugged and mountainous. Norway’s coastline rarely fre...
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