Dynamic paths of innovation in natural resource industries in Australia and Norway since World War Two

ABSTRACT

This paper challenges Ed Barbier’s influential contribution to the resources and economic development debate and extends our understanding of the process of resource-based development in two relevant economies since World War Two. We argue that: the expansion of resource-based industries remained a viable path of economic development in the ‘contemporary era’ since the 1950s; nations have modernised their economies while continuing to invest in resource industries; and innovation frontiers more than physical frontiers shaped the development of natural resource industries. We build our argument by providing a comparative study of two successful resource-based economies, Australia and Norway. Our focus is on aquaculture and offshore oil and gas, growth industries in both countries. Aquaculture is renewable and of recent origin, offshore oil and gas is non-renewable but with a longer history in other nations. Differences between the two nations are also discussed, particularly the narrower product specialisations of Norway. In both nations and both industries, though, there are common patterns of knowledge-intensive development through three stages – learning from older and imported technologies, the development of national capabilities, and their exploitation overseas through internationalisation – that draw upon the relationship between the resource sector and its supporting enabling sector.

KEYWORDS:

• Natural resources
• aquaculture
• oil & gas
• Australia
• Norway

JEL CLASSIFICATIONS:

• N50
• Q2
• N70
• O13

Acknowledgements

We are grateful to participants at the Asia Pacific Economic and Business History conference, Adelaide, 2016 for helpful comments on our draft paper.

Disclosure statement

No potential conflict of interest was reported by the authors.

ORCID

Simon Ville http://orcid.org/0000-0001-8314-6002

Notes

1 We use the term ‘economic development’ in this paper in the sense of the stages of economic change rather than merely the growth that generally accompanies it. Industrialisation is thus taken to refer to manufacturing industries as the basis of modern economic development in contrast to resource-based economic development which draws substantially on the natural resource industries.

2 Barbier (2015, p. 68) suggests that development based on natural resources may expand ‘fixed’ resources, that linkages may create dynamics in other parts of economy, and that there may be knowledge spillovers from NRI. However, the analysis and conclusion of the paper do not draw on these insights. The focus remains avoiding a natural resource enclave, instead using resource rents to invest in industrial production.

3 Other countries belonging to this group include Canada, Denmark, Finland, Iceland, New Zealand, Sweden, the Netherlands.

4 In the long run, all industries can expect to experience stagnation and decline (phase 4), but we do not discuss this as it is so far not relevant for the cases analysed.

5 Retrieved from https://www.csiro.au/en/Research/AF/Areas/Aquaculture.

6 Retrieved from Norskpetroleum.no.

7 NORSOK was introduced in 1994 to set industry standards regulating such matters as safety and cost-effective design.