A growing number of firms, not only machinery companies, have targeted the oil industry. Labour shedding in some sectors has freed up labour for other uses. Oil companies have shown the capacity and the willingness to pay. Tax rules have favoured investment spending. Earnings have been solid. The companies’ employees have been wage winners here in Norway (see Chart 3). A state-of-art oil service industry has emerged. New products and technological solutions have been developed. For many, the contracts on the Norwegian continental shelf have been a springboard to new export markets. There is a wide array of examples of company turnarounds. Let me offer one: The manufacturing company Øglænd in Rogaland, established by Jonas Øglænd from Sandnes as far back as in the 1860s, launched the bicycle brand DBS in 1932, which later became a household name in Norway. Today, the company, which is one of Norges Bank’s regional network contacts, is one of the world’s leading producers of suspension systems. Its customers are mainly oil and gas production companies. The company has more than doubled its turnover over the past three years. Around three-quarters of its sales are outside Norway. The oil and gas industry has been decisive for the strong growth in the Norwegian economy over the past 40 years. But the past 15 years stand out. From the end of the 1990s, the price of North Sea oil rose from about USD 10 per barrel to over USD 100 per barrel.
The structural changes described in it have come to pass. The resulting growth in prosperity was more difficult to predict. The development of an advanced oil service industry is an industrial adventure in its own right. We have extracted large quantities of oil and gas at very favourable prices, and have set aside a sizeable portion of the revenues – to the benefit of future generations. The oil age is far from over. But activity in the petroleum sector has passed the peak. In addition, we must be prepared for lower returns in the oil industry. The white paper also provides a glimpse into a time when belief in government intervention in the economy was far greater than today. That regulatory optimism has diminished significantly. We are left with an important recognition: The key to economic progress is the ability to restructure. We cannot rely solely on the sea to carry us forward: Let me again quote Kielland: “It is not true that the sea is faithless, for it has never promised anything...” Where our journey takes us is our own responsibility. Come what may. Thank you for your attention. BIS central bankers’ speeches  9  10  BIS central bankers’ speeches  BIS central bankers’ speeches  11  12  BIS central bankers’ speeches  BIS central bankers’ speeches  13  14  BIS central bankers’ speeches  BIS central bankers’ speeches  15  16  BIS central bankers’ speeches