One million academics need work
Norway needs to find jobs for more than one million highly educated people. "It is not skilled workers that need help – it is their children," says Professor Victor D. Norman.
"In the process of adjusting to a knowledge economy, it is not skilled workers that pose a challenge," claims professor of economics, Victor D. Norman.
The problem is the academics. Today, nearly half of all 25–40 year-olds have an academic background. People with only basic compulsory schooling or upper secondary education are primarily in the oldest segments of the population.
"They are not the problem. Major adjustments are needed to be able to provide meaningful work for the 50% of the population who have higher education. This is where the real challenge lies," says Norman.
Slow progress?
The discussion about restructuring the economy and the transition to a knowledge economy took place at an education policy seminar: "The transition to a knowledge-based society – why is it taking so long?" arranged in honour of the professor of economics and former rector of NHH Jan I. Haaland, who recently turned 60.
There are currently over one million academics in the workforce. This figure will rise to one and a half million in the next 10–15 years. The challenge is how to ensure these one million people are productive workers. This is the crux of the transition to a knowledge-based economy, Norman explains.
If we can achieve this, the Norwegian economy will do very well in the future. However, if we fail in this task, it does not matter what else we achieve, according to Norman.
Productivity
"If we do not manage to increase productivity among these one million workers, then there will be no growth in the Norwegian economy at all. So, what can we do? The answer is certainly not a more advanced assembly line. We need to exploit the knowledge people have acquired through many years of education."
Norman recommends taking IBM's old slogan as a starting point: "Machines should work; people should think." The first part of that statement is easy, according to the former NHH rector and minister – getting machines to work.
"It is the second half that is more challenging. How can we get workers to think and thus become more productive? We need businesses that can use large numbers of people. We already have some companies like that today: Telenor and Kongsberg are prime examples. The problem is that there are far too few of them."
So where does the problem lie?
Why haven't we come any further? Norman asked. He then went on to mention three non-exclusive options.
"Could it be because there is something wrong with trade and industry? Or with academia? Or perhaps there is nothing wrong with either of them? I think there are elements of all three, but I think the main thing to remember is that major restructuring processes take a very long time. This is central to the discussion."
Norman did not elaborate further on industrial policy and instead turned his attention directly to the field of higher education.
"Of course we need researchers of a high international calibre – there is no doubt about that. We need to be able to import knowledge from outside promptly. We must be at the forefront of knowledge on a global basis. We need researchers who keep abreast of developments and have far-reaching networks that can pick up on new ideas."
No good news
Norman also issued a warning to universities and colleges, saying they must make sure that the knowledge generated does not stay hidden away in the ivory towers. This renders it meaningless, according to Norman.
"Teaching is the main channel to convey knowledge. Teaching must therefore be a priority. We currently have a system where much of the researchers spend a lot of time and intellectual energy checking whether they have published their findings in the right places," said Norman.
Head of the Center for Empirical Labour Economics (CELE), professor Kjell G. Salvanes of the Department of Economics, was not particularly positive:
"I have no good news and a lot of bad news."
Productivity Commission
In his capacity as a member of the Productivity Commission for two years, Salvanes has analysed how Norway is faring, compared with other European countries.
Norway is not at the top of the league in terms of research, innovation or adoption of new technologies. In its first report, the Commission said that this position is not consistent with high productivity growth and a continued high level of income in the long term.
"What are the challenges we face?" Salvanes asks.
"We have had an oil-based economy for a few decades. In the past, we have had substantial revenues from other natural resources too, not least fisheries have been important. However, the resource-based economy based on oil, and the industry that has been built up to serve the oil industry is on an entirely different scale. This locomotive is now losing steam."
Knowledge-based economy
We are moving from a resource-based to a knowledge-based economy. The oil industry was also based on knowledge, Salvanes stressed, but today and in the coming decades, knowledge will be far more important and a decisive competitive factor.
"From 1996 to 2005, average productivity was 3% a year. Today it is less than 1%, and this is not a temporary downturn – it seems to have settled at a stable lower level."
Although Norway has not outperformed comparable countries in areas such as research and innovation, the country has fared better than most. In terms of consumption, Norway has looked very good. This is all due to oil, according to the professor.
Myth about education
Salvanes claims that the resource boom Norway has seen in recent decades has had some hidden effects, which may have served to undermine our ability to adapt.
There has been heavy investment in oil-related research, possibly at the expense of innovation and adoption of new technologies in other industries. This has not been adequately analysed. Many people have walked directly into well-paid jobs in the oil industry, without having gone through the education system.
"In Norway, we like to believe that the level of education is very high and that the quality is very good. Last autumn there were even some people claiming that the level is too high", Salvanes says.
Our starting point
If you look at the proportion of the population that has a master's or doctoral degree, because it is this group that is important in the context of innovation and adoption of new technologies, Norway is below the average, according to OECD figures.
This is an important fact. This is our starting point.
"It doesn't matter what you think about it; this phenomenon is not insignificant," Kjell G. Salvanes concludes.