The Single Product Economy

By Douglas A. McIntyre Updated Mar 3, 6:05AM EST · Published Mar 3, 5:04AM EST

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Norway ranks No.12 in the world in oil production. It relies on crude to fuel its economy much like several nations in the Middle East. Some oil production in the politically torn region has dropped particularly in Libya. Norway’s problem is quite different.

Bloomberg writes that “Statoil ASA (STL) and Eni SpA (ENI) are among companies with plans to drill a record number of wells in Norway’s far north this year to help the world’s second-largest gas exporter to sustain output. So far, they’ve struck out.”

It might be defensible for Middle East nations with poorly educated populations which are also impoverished to have no recourse to diversify. Norway has no such defense. Its population is among the most well-educated in the world. Its economic growth has been reasonably strong. Public debt is only 48% of GDP.

Norway could argue that diversification of its economy was never possible. That is not true in light of an analysis of post WWII Europe. Norway’s finances and infrastructure were not destroyed by the battles and bombings of Europe. Germany’s were. The same can be said about the destruction and resurrection of post WWII Japan.

Norway’s GDP is currently behind Belgium, Switzerland, and Turkey. Each of these has built manufacturing, financial, or services businesses. Norway could have become the large financial hub in Northern Europe. It had just as much claim to that possibility as Spain or France. Norway remained flat-footed and complacent. There may be a lesson in that.

Too much money and security may lull a country, its government, and its citizens to sleep. Norway has become a socialist nation, and it can argue that there is almost no poverty in the country.

Norway’s citizens may be among the most fortunate in the world, but that will only continue until crude and gas production begin to falter. It would be a good time for Norway to retool its economy before it is too late.

Douglas A. McIntyre

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.