Structural Change and Productivity in the Market Economy of Mainland Norway: 1997-2014

Abstract

Based on a newly compiled Norwegian KLEMS database, this article investigates structural change and productivity in the market economy of mainland Norway for the 1997-2014 period. The findings largely confirm the general trends identified by many other studies. However, detailed sector analyses reveal substantial differences within both goods production and services sectors. In addition, an increased share of skilled labour in value added is found for the total market economy over the entire period, as well as for almost all the sectors, at least for the latter period (2008-2014). For the total market economy, the shares in value added of both software and R&D capital increased, while those of hardware decreased, for the whole period. With a few exceptions, this finding also holds for most of the sectors, at least for the latter period (2008-2014). Finally, test results indicate that the complementarity hypothesis between ICT capital and skilled labour is not supported, but that between Intellectual Property Products (IPP), and esp. R&D capital, and highly skilled labour is supported, implying that intangible assets combined with human capital had been playing an increasingly important role in recent economic growth in Norway.

Structural Change and Productivity in the Market Economy of Mainland Norway: 1997-2014