Discussion on Some Political Strategies Using Science/research to Promote Industrial Development and Economic Growth

Discussion on Some Political Strategies Using Science/Research to Promote Industrial Development and Economic Growth:

On the Hervikutvalget, NOU report 2000

1 Introduction/ Objectives of the Paper

The objective of this paper is to discuss some political strategies used by the Norwegian government to promote industrial development and economic growth by using historical and current examples. Norway has itself set the goal of reaching the average OECD level of investment in research and development (R&D) by 2005 (OECD Country Report 2002:1). This means a growth from 19 billion to 27 billion NOK, a significant part of which is supposed to come from an increased capital input in research and development. In order to achieve this goal, the Norwegian government is giving a priority to strengthen the science system through increased funding of long-term, fundamental research in the following four areas where Norway faces major challenges: marine research; information and communication technology; medicine and health care; environmental and energy research. The long- term aim with the latter is to strengthen the higher education in the country in general and the institute sectors in particular through "rewarding quality; upgrading and renewing equipment; increasing the recruitment of researchers; intensifying efforts to achieve equality of opportunity" (OECD, 2003: URL for www.oecd.org). The discussion in this paper is therefore concentrated, first, on providing a brief historical overview of the political strategies of the Norwegian government starting from the immediate post- World War II period, and second, on analyzing and comparing the concrete proposals about innovation systems made by the Hervik- utvalget from 2000 with prevous ones. From a theoretical point of view, an innovation system is build upon the relations between the industry, the research institutions, and the public policy system (OECD, 1997: URL for www.oecd.org). It is closely related to the public policy for education, research, industrial and commercial development in the specific country, and is therefore perceived as the concrete or official research- and industrial policy of the countryÒ' s government. The innovation or technology policy has the objective to stimulate innovation within companies in both the private and public sector of one country. In any case, some of the necessary preconditions for innovation are the existence

of demand for new goods and technologies and the existence

of new, potential markets, the existence

of already developed technology or the need for new one, e. g. In that perspective, although not always the demand, knowledge- and competences development through R& D is of central necessity (...).

2 Political Strategies until year 2000

The need to stimulate the Norwegian industrial sector and the countryÒ' s economy in general in the immediate post- World War II period has led to the establishment of different initiatives aimed at achieving long- term economic growth and technological development. In spite of the fact that the latter were addressed to as necessary, concrete initiatives as a part of the political objectives of the government were initiated first some decades later.

2. 1 The 1980s

In the beginning of the 1980's, the Norwegian economy experienced a change in the organization of the industrial and regional policies. The period of decline in the industrial production increased the fears that the Norwegian industrial sector would not be able to adjust and establish itself as a knowledge- based one. Heavy state dominance and direct state control in almost all industrial sectors were the basic features in the Norwegian economy in that period of time. A change in the R&D- and technology- based innovation policies led to the appointment of national priority areas and strategic planning. The priority areas appointed were the information technologies (IT), giving freedom to the previously state owned research and counseling institutions, and priority programs in the regional policy. This all, however, led to a reduced interest in the technology as a driving force, because it was thought that in order a company to change in accordance with the new technology, it should first have the potential to accept it. Thus, the new technology was dependent on adjustments on both sides.

Another major objective initiated by the Norwegian government in the late 1980s was to gradually decrease the dominant role and direct engagement of the state in industrial sectors of the country, because it was recognized that the state- owned businesses appeared less flexible to adjust to changes than private- owned. All that laid the foundation for the further development in the regional- and industrial development during the 1990's. It was in this period the innovation policy in Norway found its place in the political objectives of the govrnment.

2. 2 The 1990s

Following the development in the international and Norwegian economy, the industrial policy in Norway in the beginning of the 1990s became more market- oriented and more able to reflects and monitor the preconditions and the obstacles for stimulating economic growth. The lack of access to capital was recognized as a main barrier and the problem was addressed through political prepositions. A new tax-reform aimed at achieving a more neutral tax-system was introduced, and the "heavy" public support system was used as an important argument leading to the establishment of the State Industrial- and Regional Development Fund (Statnes nжrings og distriktsutviklingsfond SND). The new policy of the government appeared already in the first half of the 1990s, where new R& D projects required by the industry were financed from the state budget in conjunction with the Government's signals of what kind of industrial policy was required. In sum, the two decades until year 2000 have been characterised distinguishing changes in the organization of the industrial, trade policy, innovation, technology policy, and regional policy. The path set in the beginning of the 1990s is still imposing influence on the Norwegian industrial policy today.

From 1996 until year 2000 there have been several White papers and Commission reports concerning the industrial policy of the Norwegian government. The main focus in these papers was the significance of innovation