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The Nordics have taken a special role in the global economic system: Almost all of the large companies are in some sense high tech. The economies are also quite

by marvin 6y ago

The Nordics have taken a special role in the global economic system: Almost all of the large companies are in some sense high tech. The economies are also quite heterogenous. Norway is probably the least good example example, due to the relative dominance of the oil & gas sector, but if you look at the stock market index of Denmark or Finland, for example, you'll find that the top companies are in different industries, exporting globally and world leaders in their respective niche. I've included a Nordics fund in my global stock market portfolio, since this small part of the world economy is disproportionately diversified in high tech. I'm sure this can be duplicated elsewhere, through education and increasing the reliability of institutions. It's the kind of non-zero-sum development that would leave the world better off as a whole. In fact, I'm a bit frustrated that Norway lags behind the other Nordics in this respect. There's something about our country that slows us down when it comes to building profitable export industries.

inglor_cz 6y ago
"The economies are also quite heterogenous." Collapse of Nokia was very traumatic for Finland, it was a classical case of having your eggs in one basket. I think you never came close to such an earthquake in Norway.
- IkmoIkmo 6y ago
  Well, Oil is 18% of Norwegian GDP, Nokia topped out at 4%. Of course I'm comparing a sector vs a company but, in a way, Nokia was a sector of itself, and the Oil industry in Norway is dominated by a few companies like Equinor. So, not sure if its that much more heterogenous than Finland, but yes no such earthquake has happened yet.
  - MrDresden 6y ago
    As a tangental note Iceland is still trying to diversify its portfolio having started with only fishing, then adding aluminum, then (catastrophically!) finance with the latest being tourism. There are some interesting tech companies around (for instance one involed in the pfizer's covid supplychain, genetics, mmorpgs, ai, bionics and food processing machinery) but the lack of funding is making it real difficult for new startups to take flight.
tonyedgecombe 6y ago
Oil and gas is such a large part of Norway's economy it will always be difficult for other industries to thrive. We have the same problem in the UK with finance.
IkmoIkmo 6y ago
> Norway is probably the least good example example, due to the relative dominance of the oil & gas sector, I once found an article I haven't been able to find ever since, but it's on a basic economic theory that high profitability in sector X makes sector Y uncompetitive. (read X as Oil and Y as anything else in this example). This is because the profits not only X push up wages in sector X. But also in Y, because the entire market must also compete with X in a bid to attract labour. This makes Y less competitive compared to other countries which don't have such a sector X. Of course in a world without friction, labour would move across borders to the first country's sector X and thereby push up wages in Y around the world. But labour mobility is obviously lower between countries than within countries, so other countries tend to be a little more insulated from this effect of profitable industries abroad. Does anyone remember the name for this economic theory? I feel this happened with Norway. In the 70s and 80s for example you saw it become less competitive and more rapidly deindustrialised. Still, you'd also think this would fuel a high-tech industry because you'd have to get into high-value added sectors to compete. Meanwhile Norway's second biggest export product is fish. Would be fun to have a Norwegian (economist) join us for some explanatory thoughts!
- marvin 6y ago
  Just a side note, both fish and oil are relatively high-tech sectors in Norway. Oil due to harsh weather and rough offshore geography, and fish through factory ships and clever farming. But they’re both closer to pure resource exports than you’d expect from a first-world country.
- atom_arranger 6y ago
  I believe this might be happening in STEM fields in north america (maybe other places too). There's so much opportunity for smart people to make a lot of money working in tech that it makes other engineering disciplines (mechanical, nuclear, etc.) or research seem unattractive.
  - IkmoIkmo 6y ago
    Yeah absolutely, it used to be that the biggest brains all went to finance for a while in the 80s-90s. Since the 2010s the biggest brains have been going to tech to drive an advertising business based on some addictive social network stuff, kind of sad really. But if you're ivy league level, it's hard to decide to work on anything else if you can make 200k a year starting salary at age 22 in sunny California, while also working on interesting technical problems.

by marvin 6y ago

inglor_cz 6y ago

"The economies are also quite heterogenous." Collapse of Nokia was very traumatic for Finland, it was a classical case of having your eggs in one basket. I think you never came close to such an earthquake in Norway.

IkmoIkmo 6y ago
Well, Oil is 18% of Norwegian GDP, Nokia topped out at 4%. Of course I'm comparing a sector vs a company but, in a way, Nokia was a sector of itself, and the Oil industry in Norway is dominated by a few companies like Equinor. So, not sure if its that much more heterogenous than Finland, but yes no such earthquake has happened yet.
- MrDresden 6y ago
  As a tangental note Iceland is still trying to diversify its portfolio having started with only fishing, then adding aluminum, then (catastrophically!) finance with the latest being tourism. There are some interesting tech companies around (for instance one involed in the pfizer's covid supplychain, genetics, mmorpgs, ai, bionics and food processing machinery) but the lack of funding is making it real difficult for new startups to take flight.

tonyedgecombe 6y ago

Oil and gas is such a large part of Norway's economy it will always be difficult for other industries to thrive. We have the same problem in the UK with finance.

IkmoIkmo 6y ago

> Norway is probably the least good example example, due to the relative dominance of the oil & gas sector, I once found an article I haven't been able to find ever since, but it's on a basic economic theory that high profitability in sector X makes sector Y uncompetitive. (read X as Oil and Y as anything else in this example). This is because the profits not only X push up wages in sector X. But also in Y, because the entire market must also compete with X in a bid to attract labour. This makes Y less competitive compared to other countries which don't have such a sector X. Of course in a world without friction, labour would move across borders to the first country's sector X and thereby push up wages in Y around the world. But labour mobility is obviously lower between countries than within countries, so other countries tend to be a little more insulated from this effect of profitable industries abroad. Does anyone remember the name for this economic theory? I feel this happened with Norway. In the 70s and 80s for example you saw it become less competitive and more rapidly deindustrialised. Still, you'd also think this would fuel a high-tech industry because you'd have to get into high-value added sectors to compete. Meanwhile Norway's second biggest export product is fish. Would be fun to have a Norwegian (economist) join us for some explanatory thoughts!

marvin 6y ago
Just a side note, both fish and oil are relatively high-tech sectors in Norway. Oil due to harsh weather and rough offshore geography, and fish through factory ships and clever farming. But they’re both closer to pure resource exports than you’d expect from a first-world country.
atom_arranger 6y ago
I believe this might be happening in STEM fields in north america (maybe other places too). There's so much opportunity for smart people to make a lot of money working in tech that it makes other engineering disciplines (mechanical, nuclear, etc.) or research seem unattractive.
- IkmoIkmo 6y ago
  Yeah absolutely, it used to be that the biggest brains all went to finance for a while in the 80s-90s. Since the 2010s the biggest brains have been going to tech to drive an advertising business based on some addictive social network stuff, kind of sad really. But if you're ivy league level, it's hard to decide to work on anything else if you can make 200k a year starting salary at age 22 in sunny California, while also working on interesting technical problems.