On “The Sea”, the main theme of the new banknote series

Norway is a small country, but a major coastal nation. Norway's coastline is the longest in Europe, and the seas within its maritime borders are seven times larger in area than the country's land territory. The topography is varied, with fjords that cut deep into the mainland, and an outer coast that varies between exposed stretches of open sea and the more sheltered waters of the archipelago. Norway's long, gnarled coastline has shaped the identity of Norwegians individually and as a nation. The use of marine resources, combined with the use of the sea as a transport artery, has been crucial to the development of Norway's economy and society.

Based on a text by Anders Haaland

Unique geography and topography

Norway is bounded on the south, west and north by ice-free seas, which in places cut right into the mountains. The fjords have made it possible to cross ecological zones and provide the basis for local divisions of labour, while ensuring fertile fjord settlements access to the open sea. The rugged coastline is sheltered in many places by archipelagos, which facilitates marine transport. The name of the country in both Norwegian and English is derived from the Old Norse Norvegr, the sheltered "northward route".

The maritime economy has deep roots

The sea has served as both larder and highway. Boats were therefore as important to Norwegians of old as cars and trucks are to their descendants. Shipbuilding became a world-beating technology, setting the stage for the Viking Age in the years 800–1050 and the settlement of the islands in the North Atlantic and of Iceland and Greenland, with visits to the east coast of North America.

During the civil war period (1130–1200), most of the hostilities took place at sea. The pretenders to the throne with their supporters and allies sailed up and down the coast between the Oslo Fjord and Trøndelag. The first organised defence system, the leidang, or fleet of (more than 240) conscripted warships, with roots back in the 940s, was also oriented towards the sea. Along the rivers it reached as far inland as the salmon.

After two centuries of decline and stagnation as a result of the Black Death (1349), other epidemics and a colder, wetter climate, growth in the economy and population recovered from around 1550. The recovery was driven by fish, timber and shipping.

The North Sea and the western portion of the Skagerrak were always ice-free, and Norway was situated close to Europe's new economic centre of gravity: the Netherlands, Britain and France. Increased exports led to the emergence of a number of new cities and towns along the Oslo Fjord and Skagerrak. Nearly all of the around 60 cities and towns in 1865 were coastal, and for a long time, port functions associated with foreign trade were more important than the economic relationship with the surrounding countryside. Owing to its bountiful resources, over the past four to five centuries, Norway has had a surplus of products in demand in international markets and relatively large foreign trade. This was accompanied by a separate Norwegian merchant fleet, to carry cargoes of goods to and from its union partner, first Denmark and then Sweden.

The world's shippers

The liberalisation of world trade from the 1850s led to a dramatic expansion of Norwegian shipping. Most of the cargo would now be carried between foreign ports. By 1880, the sparsely populated country had built up the fourth largest merchant fleet in the world, with between 6 and 7 percent of all tonnage. The home ports of most of the fleet of sailing ships were the coastal towns between the Oslo Fjord and Bergen. Wooden sailing ships were built of local materials. On the rather thinly populated Agder coast, there was a nearly total mobilisation of manpower and materials for the benefit of sailing ships. This reflected the near dominance from time immemorial of the sea as a transport artery for the Norwegian coast, with widespread skills in seamanship and in the construction and operation of sailing vessels. The large fishing industry is a part of this picture. In 1900, it comprised 100 000 vessels large and small.

The more technically complicated and far more costly steamships made of iron and steel posed challenges. The small towns in the south struggled with the transition, as did Stavanger, a larger town, which in 1880 had a fleet of 600 large and small sailing ships. Bergen, Oslo, Tønsberg and Haugesund took the lead in the steamship era. But in the period to the 1920s, Norway lost some of its relative position as a maritime nation.

An emphasis on motor-propelled crude oil tankers and break-bulk cargo liners resulted in a renewed growth boost. The shipyards, which had built a large number of steamships in the years to 1920, struggled to keep busy in the interwar years. But far-sighted and daring ship owners obtained shipbuilding credit abroad. This freed them from dependence on the tight economic conditions in Norway, where a banking industry in crisis was a serious problem. In the 1930s, even the small towns in the south and Stavanger re-emerged as dynamic maritime towns. Oslo became the largest maritime city by far. When war broke out, Norway had one of the world's largest and most modern fleets of tankers and liners. This proved to be Norway's chief contribution to the Allied war effort against Nazi Germany.

In the same period, three coastal towns in Vestfold county created the world's largest whaling fleet. With their large whale factory ships, they caught up to 30 000 blue whales in the Southern Ocean in in the course of a season. A couple of the largest companies also operated tankers. From Troms and Sunnmøre, there was extensive sealing near and on the drift ice, from Novaya Zemlya in the east to Canada in the west. Fishing vessels from Sunnmøre were also involved in fishing for cod and other white fish in distant waters (Greenland), and together with other fishermen from western Norway fished for herring off the coast of Iceland.

Even a decidedly internationally oriented industry like shipping experienced a slowdown in capital investment in a crucial phase of the post-war recovery. The reason was the need for foreign exchange for industrialisation. This led to a moratorium on new contracts in the period 1948–50. Even so, in the first three post-war decades, the merchant fleet was built up into an important and profitable export industry. Tankers and freighters in scheduled service were the most important cargo vessels, and tankers have survived until the present day. New types of cargo include chemicals and liquefied natural gas, areas where Norwegian shipyards contributed to the evolving technology. In the 1970s, most of Norway's scheduled freighters were phased out. After a short period in container shipping, the largest shipping company went over to auto transport. Many others followed suit, and auto transport has become a Norwegian speciality. Two hundred Norwegian-owned vessels carry a large portion of the motor vehicles shipped between Asia, the Americas and Europe. Other shipping companies have specialised in "industrial shipping", using purpose-built vessels under long-term contracts with manufacturers to carry particular cargoes such as timber, paper, cement and ore. The most recent addition is offshore ships of various kinds, a fleet of 600 in part very expensive vessels that has become the world's second largest of its kind. Many of them have their home port in the fishing regions of western Norway: In collaboration with local shipyards, dynamic herring fishermen found a new outlet for their entrepreneurial spirit when the expansion of their industry ground to a halt in the 1970s.

Structural changes in the fishing industry

The fishing industry is an illustration of the ability of the Norwegian business sector to make structural changes. Around 1900, with its 100 000 fishermen, it was among Europe's largest in terms of catch and participation, but the industry had not kept up with technological advances. Most fishing by far still took place in nearby coastal waters from small open rowboats and sailboats using hand lines and nets. When the combustion engine began to be used around 1905, the mechanisation of fishing followed quickly. Engines were installed in the old open wooden boats and in newly built small craft. After two decades, Norway had the world's largest fleet of motorised fishing vessels.

The combination of fishing, whaling and sealing contributed to a larger and more dispersed coastal population than would have otherwise been the case. In the difficult 1930s, the government banned trawling in Norwegian territorial waters as a measure to protect the structure of the northern Norwegian cod fisheries. Engines could also be used in wooden boats that were large enough to handle new and effective fishing gear, such as purse seines for catching herring. Along with the appearance of large herring populations, this resulted in more than a doubling of the catch in the interwar period. But since the markets for pickled and fresh herring were limited, and economic crises abroad weighed on prices, an increasing proportion of the catch went to factories that processed the fatty herring into fish oil and fish meal.

From the 1950s, only active fishermen were allowed to own fishing vessels. In the 1970s, catch volumes, as well as the size and structure of the herring fleet, were also regulated through quotas and licences. Although this regulatory regime has survived into the present largely intact, it has not stood in the way of technological modernisation and increased economic efficiency. Both large and small vessels now employ advanced technology, and fishing has become a full-time occupation. Norway's fishing industry is highly efficient and owing to research-based management and extensive cooperation with neighbouring countries is among the most sustainable in the world.

To prevent overfishing in international waters, in 1977, the UN gave coastal states control of fishing in economic zones 200 nautical miles from the coast – a dramatic extension of territorial waters that had initially been 4 and then 12 nautical miles. Norway benefited immensely from its location on the periphery. With a fishery protection zone around Svalbard and fishery zone around Jan Mayen, Norway currently controls sea area that is five to six times larger than its land area. Structural adjustments have also been substantial in the fishing industry on land. The canning industry has now disappeared. Only a few herring oil factories are left, and they primarily supply a completely new industry: aquaculture. As late as 1970, production of farmed fish was insignificant. Today it is more than 1.5m tonnes.

Still a strongly commodity-based economy

The discovery of petroleum resources in the North Sea and emergence of aquaculture changed the pattern again for Norway. The division of the continental shelf according to the midline principle in 1965 gave Norway sovereignty over considerable oil and gas deposits.

It could not be taken for granted that such a small country would be able to ensure national control and operational participation in the incredibly demanding project of extracting oil and gas from deep below the sea floor. The Norwegian government established its own production company, Statoil, and in the spirit of the licensing laws governing water resources and hydropower, strict conditions were set for the awarding of production licences to private companies, foreign as well as Norwegian.

Thanks to favourable prices in the years up to 2015, the oil sector has helped to make Norway one of the world's richest countries, with a per capita GDP far above the EU average. Successful management has created the Government Pension Fund Global, which today is one of the world's largest sovereign wealth funds.

Endless ability to make structural adjustments?

Economic development also entails changes in consumption habits. Norway has managed better than most other countries in the long-term growth and structural adjustment process. This restructuring has largely been based on increasingly innovative forms of marine and maritime resource utilisation and new know-how related to fishing, fish farming, shipping and engineering. At the same time, experience and expertise could be transferred from one area to another. An old example is the linkage between fish and timber exports and international shipping. The breakthrough for the fish farming industry came when operations were moved out into salt water, and herring fishermen with expertise with seine nets developed efficient and robust floating cages.

The petroleum sector profited from older industries. It was important that there had been a century-old modern shipping industry in Norway that had specialised in the large-scale transport of crude oil, liquefied natural gas and chemicals before the "oil adventure" started. A technologically advanced shipbuilding industry yielded similar benefits. The development of gigantic concrete platforms was partly based on experience from concrete dam construction in the mountains, with tunnels and pipelines to power stations and factories. The experience of ocean fishermen with medium-sized steel boats and the inclement waters of the North Sea, as well as their close relationship with the shipbuilding industry in western Norway, paid off when the offshore fleet was built up.

The focus is now on all of the untried possibilities found in the sea and coastal waters: New species for aquaculture, seaweed and kelp farming, harvesting of biomass lower on the food chain, windmills at sea, etc. "Ocean space" and the "blue growth" are not mere buzzwords. The Norwegian Government has formulated an ocean strategy, with the aim of bolstering already existing centres of excellence in fisheries/marine research and management. From various quarter it is claimed that The future is written in water, and that Ocean space is a new chapter in the story of Norway.

Published 27 July 2017 10:10