Productivity growth has stagnated in most OECD countries. Goods production has declined, while services production has increased, as in Norway. But this shift was based on borrowing rather than increased earnings in many countries. After the financial crisis, funding sources dried up and these countries were faced with a debt crisis. Fundamental structural problems with eroded competitiveness came into evidence. These countries must not only reduce their debt levels, but also engage in a painful process of adjustment and rationalisation. Only then can these economies find the path to renewed growth. The Norwegian economy has experienced virtually 20 consecutive years of growth. We have invested in a hugely profitable oil industry and found a balance between spending petroleum revenues domestically and saving petroleum revenues in the form of foreign investment. On the other hand, it seems that both the public and private sectors are having difficulties finding profitable mainland investment projects. Taking a longer view, this is a source of concern. Should petroleum revenues shrink, we need more pillars to stand on. Otherwise, we would have to embark on the path of adjustment towards renewed growth, the path that other countries are already going down. Conclusion Let me return to Johan Borgen. For Wilfred Sagen and his peers, the festive times did not last long. The war came to end and freight earnings declined. The boom period was followed by hard times. Banking crises, parity policy and protectionism led to prolonged and deep recessions in the world economy. The environment is entirely different today.

Over the years, we have developed an internationally competitive petroleum supply industry of considerable scope. While the companies operating on the Norwegian continental shelf had to import virtually all their equipment in the 1970s, the import share has now dropped to just below 40 percent. The Norwegian engineering industry has flourished. The supply industry has become a major export industry. Almost two-thirds of total Norwegian exports are now linked to the petroleum industry. Chart 10: A manufacturing sector divided Vigorous activity in the oil and gas industry also helped Norwegian manufacturing fare better than manufacturing in other OECD countries during the financial crisis. The petroleum industry is a buffer against the current downturn in advanced economies. In that respect, the Norwegian economy has become more robust. The flip side of the coin is that our economic future is becoming increasingly dependent on oil and gas activities. The substantial petroleum revenues and the spillover effects from oil and gas production are reflected in the  BIS central bankers’ speeches  5  labour market and are driving up house prices and debt. In those respects, the Norwegian economy is also vulnerable. In the mid-1980s, the Norwegian economy was shaken by a sharp and long-lasting fall in oil prices. Today’s situation is quite different. Oil prices are persistently high, primarily reflecting the emergence of newly industrialised countries. But it is risky business to take today’s oil price levels for granted. New energy production technologies are being developed. Climate challenges will not disappear.