Change is constant: Doing and Making

Nations constantly change to better and improve the lots of their populations and communities. They do this by thinking, planning, and doing. Even despite past failures. Visionary and hands-on individuals: entrepreneurs, businesspersons, managers, inventors, policymakers and technocrats take the opportunity to innovate and create wealth when it arises.

Even for a country that is dependent on natural resources, to innovate institutionally, organisationally, and technologically is a must. One failed attempt in the past must not be a deterrent for trying again when later, another opportunity arises.

The innovations and their impacts that arise from trying and doing can often be unforeseen. But overall the gains are positive. Future-oriented technologies and services emerge to re-configure work structure and industrial outlook.

Doing

The road to Norway’s destination as a leading and innovative Oil State is dogged by policy and programme failures. One worth mentioning is a failed National ICT Industrial Strategy. After the 2nd World War, Norway inspired by the technology prowess of America and Britain, decided to invest into industrialising around and with information technologies.

The initiative lasted three decades but did not go as planned, contends Fagerberg, Mowery & Verspagen. The policy and programme, could not produce the technology multinationals, aspired to by the so-called Modernisers – a group of Norwegian academia, industrialists, and technocrats.

National Champions such as Tandberg, Computas, Norsk Data, Simrad and others emerged and grew. They, nonetheless, did not grow big enough to contest international markets or satisfy local customers. These were, however, early pioneers of mobile phones, mainframe computers and programming language.

Nonetheless, the ‘unsuccessful’ national entrepreneurial efforts resulted in embedding digital, innovation, management, and technological competences, capacities, and capabilities in Norway’s innovation system. Such embedded attributes later became instrumental in making Norway’s Oil & Gas (O&G) industry innovative, globalised, and productive.

Putting Norway’s modernising initiative into perspective helps. Yes, it has no digital or electronics multinationals. But who else does. They are a handful. American and Japanese companies dominate. And recently, South Korean, and Chinese ones are coming into play.

Few European companies have come into force. SAP and Siemens in Germany, Phillips in the Netherlands, Ericsson in Sweden, and Nokia in Finland, are the few that come to mind. Nonetheless, Multinational European mobile operators are fast becoming Digital Corporations. French Orange, alongside Verizon are listed amongst the Top 50 innovative companies in the world in the BCG Most Innovative Companies 2018. And Norway’s Telenor may not be far behind these two.

How the impacts and success of an Industrial Strategy are measured resonate here. But this is not the focus. This is about constant national development and innovation, even when success seems tentative. 

Even as Norway’s policymakers and industrialists were disappointed with the nuanced success of its National ICT Industrial Strategy, they were nonetheless undeterred. So that when an opportunity to do same arose, they took it.

Undeterred

The remarkable success of Norway’s O&G innovation and enterprise comes after a second attempt at fostering large-scale industrialisation. Shortly after industrialising high-tech was believed as unsuccessful, Norway enacted another one for industrialising hydrocarbons.

Undeterred by the supposed failure of the earlier one, Norway pushed forward to nurture and protect its tender O&G firms and start-ups. The means it employed, and ends achieved are shared here and there.

The emergence of certain companies unto the global stage, exemplifies the success of the nation’s O&G industrialisation. The entrepreneurial efforts of the Norwegian government underpin their journey of creating values and wealth for its population and communities.

Statoil, the Norwegian oil operator started in 1972, it is today a multinational. It operates in several countries across the world and leads in petroleum and green innovations.

Aker, today has emerged as an Oil services multinational. It has operations in about 30 countries around the world where it is offering unique technological and management services. Not bad for a company that first ventured into petroleum business 40 years ago.

The second time around, Norway has produced multinationals out of its Industrial Strategy. It has also produced an industrial Digital Corporation – the Kongsberg conglomerate. And countless global SMEs with deep capabilities in upstream technologies and services, aerial and maritime drones, microelectronics, autonomous vehicles, robotics, virtual reality, semiconductors, and wind turbines.

The O&G industry has also created a platform for the emergence of future industries. The Pumps & Pipes conference in Stavanger, Norway’s petroleum capital, is driving innovations and entrepreneurship in digital health and biotech. The same way the Energy2Health initiative is doing in Oslo, Norway.

The O&G industry has also endowed Norway with an education system that is skilled at solving practical living and industrial problems. By this virtue, the nation has a well educated and talented workforce that is driving its economic diversification and development.

The success of Norwegian companies is not only due to governmental actions. It is also due to the entrepreneurial and management strengths of their executives and managers. These have developed organisational processes and structures that meet the opportunities and challenges they face heads-on.

Frithjov Nerby on Statoil has examined such. So also have Fredrik Dahl et. al. on Aker, a 170 years-old firm, and Stein Bjornstad on Kongsberg. The companies have expanded and grown by fostering continuous organisational innovation, developing and adopting technologies, and investing into and building competent workforce and talents.

Both Aker and Kongsberg have also grown by conducting smart mergers and acquisitions. These purchases of local and foreign companies augment their core competences and capabilities. In the same vein, a Norwegian global SME like Roxar a global leader in O&G digital instrumentation has grown big by being acquired by Oil services giant Emerson.

Norway has created enormous values from industrialising its O&G industry. And this remarkable success has come after an unsuccessful outcome of an earlier National ICT policy & programme. The nation’s policymakers and entrepreneurs were undeterred and took the opportunity to industrialise hydrocarbons when it arose.

Incident to Innovation

The use of Industrial strategy to spur development and growth is often contentious. Norway has however proven that this can work, if and when implemented and directed at solving practical living and economic problems.

Even the seemingly unsuccessful National ICT Industrial Strategy when viewed from a less critical lens, was not so. It has left Norway with embedded digital and electronics competence and capabilities, which are contributing to industrialising its O&G enterprise and driving its economy today.

These skills came handy when a monumental incident that could have prevented further drilling of petroleum in Norway struck.

The emergence of the autonomous and drone innovations came out of turning a disaster and a sour government-business relationship into a success. The exhaustive inquiry carried out by Kristin ?ye Gjerde and Helge Ryggvik in a book titled North Sea Divers, about the exploits of Norwegian divers in the O&G industry, is informative in this regard. The Alexander L. Kielland disaster where a huge oil rig platform got destroyed and submerged into the freezing North Sea led to loss of lives.

The rescue operation organised to salvage people and the wreckage called for divers. These have risked their lives to install subsea equipment since Norway struck oil. And divers have died and been traumatised doing so. But the Alexander L. Kielland disaster brought an acute precipitation to the negative trend.

The political fall-out was consequential. It prompted changes in Health & Safety rules and regulations in the industry, particularly for diving. And businesses started to innovate. Acergy, then known as Seaway Stolt-Nielsen took the lead in automating and mechanising diving.

Acergy was founded by a partnership between two entrepreneurs. Jacob Stolt-Nielsen, a shipping and oil magnate, and an inventor of the design for parcel tankers. And a renowned Norwegian diver. They built Diving Support Vehicles, ships unto which divers are tethered to when submerged in waters whilst laying pipes or welding metals for building platforms.

When human diving was found to be dangerous, Acergy took the lead to innovate. Together with the efforts of other companies, Remotely Operated Vehicles (ROVs) were designed and built to augment and substitute human divers.

The development of ROVs began the trajectory towards the automation of subsea drilling and mechanised diving. This innovation brought cost-efficiency and also saved lives. It also drove diversification in the Norwegian O&G industry. Aleksander Andersson provides a brief history of the ROV industry in Norway.

DNV, a Norwegian multinational together with a government institute created the SNURRE system. Which kickstarted the innovation process and inspired others to act. Then, a mechanical workshop – Myrens Verksted AS built Spider, a ROV with unprecedented heavy-lifting capability and manoeuvrability. And the industry grew afterwards. And companies such as Aker and Kongsberg were at the forefront of the innovation trajectory.

The autonomous innovation was part of industrialising Norway’s O&G industry. The national government via Statoil gave funds and contracts to diving and technology companies. The NORSOK programme developed by the national government for promoting Health and Safety standards also played a key role in this process.

Today, the journey that started with developing semi-autonomous tethered ROVs, has resulted in making fully autonomous untethered Blueye, Eelume, and HUGIN. Better still, in the last two decades, most innovations have been private sector driven.

The journey towards autonomy nonetheless had consequences.

Man and machines

All things being equal, autonomous technology is poised to play a prominent role in living and working. Such move offers benefits, but it also has risks, especially for employment. The introduction of ROVs into the Norwegian O&G industry offers a lesson.

Divers whose lives where saved by the introduction of ROVs, also borne some consequences. Few continued diving for less dangerous and more intuitive jobs, and in deeper seas often alongside ROVs. Most unfortunately lost their jobs. Some, with minimal formal education, that became redundant got employed by finding alternative uses for their problem-solving skills in other sectors and industries.  

Many suffered life-long medical problems. These became subjects of a long drawn out public legal inquiry. The outcome of which resulted in the national government offering considerable financial compensations. And the development of specialised medicine for divers in Norwegian hospitals received a massive boost.

This brief has import for the current debate about man and machines. The main outcomes for the Norwegian divers were both substitution and supplementation. Informing that the effects of automation on employment would include both impacts.

Going forward, this insight calls for smart policies by governments and strategies by companies to address the fall-out of automation and digitisation on employment and living. About why workers substituted or supplemented with technologies should be managed and trained to co-exist with machines.

For African countries, a managed approach to implementing automation must be considered. Creating jobs still outweighs but do not subsumes cost-effectiveness. Nonetheless, where saving human lives with robots doing dangerous jobs supersedes employing them, automation thus becomes a better choice. On the balance, though, policy or strategy must promote supplementation, but consider substitution as a last resort.

Nations driven by their policymakers and entrepreneurs must innovate to create long-lasting values for their communities and populations. Such requires changing constantly even in the face of setbacks.