Capital and expertise for companies throughout Norway
With Russia’s attacks on Ukraine, the winter of 2022 has given us a new reminder of how the international balance can be quickly upset, also affecting trade between countries. There is already every reason to assume that the war will lead to changes in international markets, supply chains, energy and food prices, and inflation and interest rate developments. This will affect the Norwegian business sector’s prospects in 2022.
By CEO Håkon Haugli
Looking back at last year, we also see global repercussions reminding us that we live and act in an interconnected world, where for better or worse, we are affected by what happens around us. In 2021, activities in the Norwegian business sector were still being affected by the corona pandemic, despite the fact that the year eventually allowed many companies to operate more normally within the stipulated infection control measures.
In line with this, Innovation Norway maintained its role as a contingency organisation for the authorities in 2021, both through identifying and communicating status in the business sector and as a manager of economic crisis packages. The assignments are part of our social mission; to trigger investments in restructuring, innovation and internationalisation. Through sparring with the business sector, both digitally and in all the country’s regions, Innovation Norway serves as a door-opener for the business sector.
Major Societal Challenges
Even before the corona crisis, it was of crucial importance for Norway to develop a more diversified and sustainable business sector. The OECD has pointed out that Norway faces a triple restructuring challenge: moving from a vulnerable petroleum-based economy to a more diversified and robust economy, developing a more competitive and efficient research and innovation system, and ensuring that this system is better oriented to meet major societal challenges.
In recent years, we have seen positive developments in several areas, also during the crisis years of 2020 and 2021. For example, we have seen a sharp increase in innovation that focuses on societal challenges, such as health and climate, and we have gained more entrepreneurs and growth companies.
However, the challenge is great. In the years ahead, Norway must create thousands of new jobs each year, increase mainland exports and achieve climate targets. A sustainable business sector is a prerequisite for achieving these goals and a prerequisite for the welfare of future generations.
Urgent action is needed to achieve the climate goals. Demand for green solutions is increasing internationally, in areas where Norway has particularly favourable conditions such as in energy and food. But a good starting point is not enough. As a nation, we must be able to convert our many advantages into solutions that are in demand and put into use.
Green Growth and Exports
In 2021, Innovation Norway has therefore worked specifically on focusing our efforts within green growth and exports. Based on a more targeted and differentiated export strategy, we can now provide services based on companies’ capabilities and qualifications. The Green Platform scheme, which was introduced in 2020, contributed to several common boosts for green value chains in 2021. This happened in close collaboration with the Research Council of Norway, Siva and Enova. The previous year was a record year for Innovation Norway’s investments in green projects.
In 2021, we also strengthened our strategic work in relation to the EU, which through its Green Deal strategy has also become a much stronger premise provider for Norwegian trade and industry. The strategy’s goal is to achieve a climate-neutral Europe by 2050. The investments now being made in green solutions in Europe provide opportunities for Norwegian companies. So does Norwegian participation in European research and innovation programmes, such as Horizon Europe, where Innovation Norway, together with the Research Council of Norway, has a responsibility to make opportunities known to Norwegian actors.
A Sparring Partner for Trade and Industry
In 2021, we have developed our role as a sparring partner for trade and industry throughout the country. We are continuously working to simplify access to our services, and in 2021 we were also tasked with becoming ‘a door-opener’ to the industry-oriented business support system. Over the past three years, we have made major investments in digital solutions that our customers adopt and are satisfied with.
Several commercially and socio-economically profitable projects are triggered by sparring with and challenging customers, and offering the right expertise and financing. We know that our loans and grants have a triggering effect regarding the implementation of innovation, restructuring and development projects, and we measure the effects of everything we do. We see that the companies we work with do better on parameters such as sales revenues, employment and profitability compared to similar companies that don’t use our services. We also see the effects of long-term contributions to new industries, where we have developed methodologies throughout 2021 in order to see effects not only in individual projects, but in entire industries over time.
However, access to venture capital continues to limit the realisation of many important initiatives in the restructuring and development of Norwegian trade and industry. Innovation Norway’s role here is also to reduce risk and thereby trigger capital. In 2021, ‘one krone’ from Innovation Norway helped trigger an additional ‘two kroner’ in the form of capital from other sources of funding. This contributed to Norwegian companies receiving a total of NOK 31.5 billion in the form of capital for important investments.
As an organisation, we are also prepared to adapt to changing frameworks. In the 2022 national budget, Innovation Norway was required to implement a permanent cost reduction of NOK 100 million over three years in the period 2022-2024. This corresponds to approximately 10 percent of our total operating costs. A cost review in the autumn of 2021 concluded that such a reduction cannot be implemented without downsizing. It is a goal that this can be solved in collaboration with the elected representatives and to the greatest possible extent through voluntary redundancies. It is also a clear goal of the management team that these changes will not affect our strategic goals and following up our customers.
In this annual report for 2021, you can read more about our many and different contributions to the development and restructuring of Norwegian trade and industry.