We need a plan for mainland industry – as soon as possible
Jan Christian Vestre, CEO of Vestre
Erna Solberg’s government has presented the National Budget for 2021. Like other leaders in the Norwegian industrial sector, I sat waiting in front of the computer, excited about whether I was going to get what I want most of all – a clear sign that, in the future, Norway will seize the opportunities open to us to build a sustainable, green and profitable mainland manufacturing industry in this country.
My wish might not have been completely fulfilled, but I am nevertheless happy that the government recognises the importance of developing more industries to rely on in the years to come.
About time too, I might add.
Because if we don’t grasp these opportunities soon, the loss of oil and gas revenues in the future will be a lot tougher for Norway to deal with than it needs to be.
A new green industry venture
Over the last few years, there has been more talk about the need for a green shift. To achieve the goals set out in the 2015 Paris Agreement, we must cut our greenhouse gas emissions. Unfortunately, very little is actually happening in practice. And we continue to invest more in oil and gas than in mainland industry. As a business leader, I am lacking a clear national strategy for investing in mainland industry. In any case, this will soon present itself as a clear necessity.
If you look at Norwegian export figures, excluding oil and gas revenues, there is certainly cause for concern. The trade deficit from the mainland economy has grown steadily over the past ten years, from NOK 179 billion in 2010 to NOK 401 billion in 2019. According to Statistics Norway, the export share in the mainland economy will have to more than double if we are to compensate for the gradual decline in revenues from gas and oil sales. Today, we are far from reaching this goal.
As I see it, Norwegian legislation should step in and support a comprehensive conversion plan. Over the next ten years, the goal must be to double investments in mainland industry, so that exports can also be doubled. As I said, it will be high time too. Because we actually invested more in mainland industry during the financial crisis of 2008 than we did in 2019 – before the pandemic hit us. The Swedes invest three times more in their industry and have achieved a 65 percent higher growth rate than us over the past five years. During the period 2015-2019, Norway had the weakest economic growth among the Nordic countries. In 2019, there were just four countries in Europe with weaker economies than us.
Simply put, we must sit down – across industries and political affiliations – and find out how we can work in concrete terms to double exports in our key mainland industries, from finished goods production and forestry to the aluminium industry, fisheries and offshore wind.
What we need to achieve is a dynamic business policy which can quickly turn around and support industries which show global growth potential.
For many years, we have lived comfortably thanks to an industry where we have major natural advantages. Fortunately, gas and oil are not the only advantages we have here in this country. When building a new green industry venture, we certainly have a lot to play with:
Firstly, we can power our industry with energy that is almost 100 percent renewable. In China, the renewable energy share is under 20 percent. In a world that is looking to cut its emissions, this is a major advantage for Norway. At the same time, we have plentiful access to some of the world’s most sustainable raw materials. No one produces greener aluminium than we do, to take just one example. As a people, we are adaptable and highly educated.
And yes, we have high wages, but if we grasp the opportunities that come with increased robotisation, automation and digitalisation, we can still be competitive. Because the world market is hungry for Norwegian products. As I see it, it’s simply a matter of time before we start asking ourselves why we have relocated so many of our industries.
Because the opportunities are there, right in front of our eyes.
More legs to stand on
As CEO of the furniture manufacturer Vestre, I am proud to lead the family business forwards. Ever since my grandfather Johannes Vestre produced his first saw clamps in an old German barracks in 1947, Vestre has been producing sustainable quality products in Norway. Today, our furniture can be found worldwide, from Times Square in New York to Aker Brygge in Oslo. We are now starting to build The Plus, the world’s most environmentally friendly furniture factory.
I am not saying all this simply to boast, but rather to show that it is actually possible to build a sustainable and export-oriented company without producing in low-cost countries. And if Vestre can do it, others can too.
“We must have ambitions to promote the industries that have a competitive advantage and link them to specific opportunities in the world markets,” states the government's action plan for exports. I couldn’t agree more!
So let us seize this huge opportunity we have to take action and build a sustainable mainland industry – and give ourselves more legs to stand on while we’re at it.