1. Overview of the R&I system
Norway’s economic development has been strongly influenced by the petroleum industry during the last 40 years. As of 2015, Norway ranks as the world’s seventh largest oil exporter. Another important feature of the country's economic structure is the significant share of service industries, including wholesale and retail trade, banking, insurance, engineering, transport and communications and public services which accounts for close to 60% of GDP.
Thanks to a hitherto favourable economic situation and solid public finances, Norway has experienced a steady increase in R&D investments during recent years. Except a short period of stagnation following the financial crisis, both public and private R&D expenditures have increased substantially in the years after 2011. Estimates for 2016 indicate that public allocations to R&D for the first time will reach 1% of GDP, a target originally set to be reached by 2019-20.
On the other hand, total R&D expenditure only accounts for 1.71% of GDP (2014), a level which has been rather stable during the last 25 years. This is primarily due to a high level of GDP and a high share of value creation in resource based industries, such as fisheries and oil and gas. Reaching the long term target of raising total R&D expenditure to 3% of GDP will require both a substantial increase in private R&D expenditure and a significant change of industry structure. The latter seems to have gained momentum as the recent decline in oil prices clearly demonstrates the need to develop alternative industries for ensuring future value creation.
The Norwegian research and innovation system is relatively dispersed at the political level as well as on the performing level, while at the strategic/intermediary level R&D and innovation funding is concentrated in a few central funding organisations.