Feb 4 2013

Norwegian entrepreneurship at the top in the Nordic countries

Norway has the highest number of young, fast-growing companies in the Nordic countries. Norway also have the highest proportion of startup companies. However, Norway as a whole has the poorest conditions for entrepreneurship in the region. This results from the survey Nordic Growth Entrepreneurship Review as seen on growth in employment among Nordic companies in the three-year period 2007-2009.

NIFU has been responsible for the Norwegian part of the report. During this period, Norway had more young, fast growing companies (so-called gazelles) than the other Nordic countries. Compared with a similar survey three years ago, Norway has gone from jumbo to peak in the Nordic countries in this area.

– Norway has long had a high percentage of start-up companies, but it is interesting that Norway now has the most gazelles in the region. The results is probably related to general activity in the Norwegian economy in the current period, says Espen Solberg, researcher NIFU.

Together, the Norwegian gazelles created more than 10 000 new jobs. Looking at job creation per business, it is still Finnish companies that are most successful. This means that Finland creates few gazelle companies, but those they have created, grows stronger in return. On average each Finnish gazelle creates 83 new jobs compared to 50 in Norway and 41 in Sweden.

– Although gazelles creating a significant number of jobs, it is not gazelles itself ensuring future growth. Many of these firms are stagnating, go bankrupt or acquired by established companies. Gazelles are first and foremost an expression of the general growth and dynamism in economy. The Nordic report points out that the Nordic countries have a challenge when it comes to start-up businesses to grow in the long term, says Solberg.

Most gazelles in the service industry
Most gazelles are in service industries. This is the case in all the Nordic countries, but most pronounced in Denmark where almost nine out of ten gazelles is in service industries. Denmark is also the country with the highest proportion of gazelles in knowledge intensive services.

Norway stands out with several gazelles within primary and commodity production. It reflects the high activity in Norway in industries such as oil, gas and seafood. Yet Norway has also managed many gazelles in services sector. Three of the four Norwegian gazelle is a service business.

Poorest conditions in Norway
The report also looks at conditions for entrepreneurship, both in the Nordic countries and in the OECD area as a whole. Norway comes in 13th place in OECD countries and last in the Nordic countries in terms of overall conditions for entrepreneurship. This indicator covers the gathering of important strengths and weaknesses of the individual indicators.

Norway ranks among the top countries in terms of access to loans and the country’s credit rating. There is also relatively little risk associated with going bankrupt in Norway. On the other hand, Norway scores low when it comes to labor market regulations and tax burden. In particular, property taxes an area where Norway is weaker. Only Switzerland ranks behind Norway when it comes to property taxes.

Norway is significantly behind the other Nordic countries in terms of research and development. This has to do with Norway’s high GDP and a relatively low R&D-intensive industrial structure.

The supply of foreign labor, Norway is almost at the top in the OECD area. Only New Zealand is ahead of Norway in this area. However, Norway scored lower in terms of supply of highly educated labor.

Culture of entrepreneurship has long been a challenge in the Nordic countries. Generally, however, a significant improvement in this area, especially in Finland. In Norway, the vision of entrepreneurship has become noticeably more positive. While Norwegians are still afraid to take risks and start their own business themselves.

Nordic Growth Entrepreneurship Review 2012 is the first joint Nordic analysis specifically focused on growth entrepreneurship. The report also compares the framework conditions for entrepreneurship across the Nordic countries and in the OECD area as a whole. The report was commissioned by the Nordic Innovation. NIFU have contributed to the Norwegian part of the analysis.

Link to Nordic Innovation and report (pdf)

For more information contact
Espen Solberg, Special Advisor, Statistics and Indicators
+47 22 59 51 22