2023 POLICY ROADMAP

Norway is experiencing an economic downturn, with higher inflation and increasing interest rates, and a weakened Norwegian currency. However, the financial system in Norway is resilient. Despite the heightened risk of vulnerabilities, the overall financial outlook is stable. Nevertheless, some entrepreneurs face difficulties due to rising costs and higher interest rates. At the same time, export-oriented businesses benefit somewhat from the weakened currency.

Norway maintains its commitment to supporting entrepreneurship through public policies, particularly focusing on youth, social initiatives and exports. Public spending on entrepreneurship and innovation support was very high during COVID-19, but is now back to pre-pandemic levels, hence significantly lower than the previous couple of years.

2023 Framework Conditions Review1

Norway had a National Entrepreneurial Context Index (NECI) score of 5.7 in 2021, placing it seventh among the 50 GEM participating economies. By 2023 this score had fallen to 4.7, less than sufficient, and placing it 18th of 49 economies.

Norway is among those European and North American economies with an entrepreneurial environment that has slipped from sufficient to less than sufficient in the short period since the pandemic. It is too early to discern whether this is just a reaction to the pandemic or marks a shift in the established order. In 2023, just four of the top 10 NECI economies were in Europe, two of which could be described as from the “new Europe” (Lithuania and Estonia) and two from the “old Europe” (the Netherlands and Switzerland). None were from North America.

Norway’s fall in 2023 relative to 2022 was the product of lower scores for 10 of its 13 Entrepreneurial Framework Conditions (EFCs), with the largest reductions being for Entrepreneurial Education at School, Ease of Entry: Burdens and Regulation, and for Government Policy: Support and Relevance. Improvements were for Entrepreneurial Finance and Ease of Entry: Market Dynamics. These falls mean that Norway had just four sufficient EFCs in 2023 (in 2022, there were seven).

National experts in 2023 were asked to assess the quality of social support for women entrepreneurs, as well as their access to resources compared to men. Norway scored fairly high in each, with a 5.2 score for social support (ranked 10th) and a 5.3 score for relative access to resources (ranked 13th).

2023 Entrepreneurial Activity Review

In the GEM Adult Population Survey (APS), just one in 10 Norwegian adults reported that their household income had been reduced in 2023, a rate that has halved since 2020.

Entrepreneurship had a reasonable profile in Norway in 2023, with one in two adults knowing someone who had recently started their own business. Slightly more see themselves as having the skills and experience to start their own business, and two out of three see good opportunities to do so locally. Of the latter, some two out of five would not start a business for fear it might fail, a proportion that has been consistent in recent years. The proportion of adults intending to start a business in the next three years was just 9%, up from 5% two years earlier, but second lowest (behind Germany) among the 45 economies participating in the 2023 GEM APS.

The percentage of adults starting or running a new business in Norway was a modest 7%, up from 3% two years earlier, but lowest among Level A economies. Men were almost twice as likely as women to be starting new businesses. The level of Established Business Ownership was slightly higher than the level of new entrepreneurship, at 7.6% of adults.

Norway had the second highest proportion of new starts in business services in the entire GEM sample of economies, behind Switzerland. Making a difference in the world was the most commonly agreed motivation for new entrepreneurs, but hardly dominant, with just two out of five agreeing. More than a quarter
of those new entrepreneurs had customers beyond Norway, and one in two intended to use more digital technology in the next six months.

Job expectations were reasonably high, with one in four new entrepreneurs expecting to employ at least six people over the next five years. Just over a quarter of those starting or running a new business were solo entrepreneurs (with just one owner and no employees), the fourth lowest level in GEM 2023.

1 A brief description of the GEM approach is given in the footnote on p. 107.