Innovation by co-evolution in natural resource industries: The Norwegian experience

Abstract

Some resource-based economies become wealthy while others stay poor and Norway belongs to the first category. This paper argues that part of the answer to why Norway has managed to benefit from its rich natural resources is found in the formation of a well-functioning national innovation system. The paper integrates the innovation system approach with a historical approach through the concept of co-evolution. The empirical study investigates how innovation systems evolve in natural resource industries through analysing the co-evolution between industry, knowledge organisations and national policy in the Norwegian aluminium and petroleum sectors. Parallels are found in the development of these two sectors, which are: (i) the deliberate use of concession laws to seize value creation and technological development from foreign direct investments, (ii) the establishment and prioritisation of state-owned companies and (iii) the more or less intentional formation of a national innovation system. The paper points to the relevance of analysing the historical evolution of national innovation systems to understand the creation of their specific path-dependent characteristics, to analyse how policy influences the creation and working of innovation systems, to use a multilevel approach in studies of innovation systems and to consider how innovation processes in different industries are linked in value chains and through knowledge flows.