1. The oil industry and regional transformation in the North – Creating Innovation Systems in the Wake of Developing the Snøhvitfield 2002-2008 Sveinung Eikeland, Northern Research Institute (Norut), Alta

3. Map from the web

4. Snøhvit: Subseasystems; LNG- plant; CO2 catching and storage

5. Three perspectives on the oil- and gassector and innovation 1The oil industry as a brake on innovation activities 2The oil industry stimulating clusters and other types of innovation systems 3Innovation in the oil industry is related with very different phases and functions in the sector

6. 1. The ”brake” perspective The oil industry characterised by: - technology import - imbalance between established population and industrial structure and activities - low level of interaction with other economic sectors - long distances between operation areas and economic centres The oil industry contributes to: - high level of public spending - strengthening of national currency - high salaries in the labour markets

7. 2. The growth perspective Strengthening regional clusters, e.g. the maritime cluster in Møre and Romsdal Forcing innovation in the oil- and gas sector systems

8. 3. Innovation in the oil – and gas sector Innovations have very different position and roles as: –Changing exploration methods –New types of developing/construction and industrial processes –Upstream innovations –Downstream/industrial innovations

9. The oil industry in Northern Norway 40 years after the establishing of the national oil – and gas sector on the southwest coast 2 % of the employment in Norwegian supply sector Long distances to the main points of Norwegian oil and supply sector The activities moving towards North and the Barents Sea. Snøhvit the first field developing project in the Barents Sea

10. Perspectives on developing of a petrobased innovation system in the North In general: Focus on enterprises, their stable relations and local enterprises position and roles. In North The entry of well established innovation systems, not developing new systems Focusing on developing of innovation systems across long distances North an innovation arena

11. From perspectives to research questions 1What characterise the forming of an innovation arena in the North in the wake of a field development in the Barents Sea? 2 What characterise local enterprises connection to the entry of the global/national oil- and gas sector? 3 How influence the types of connections on developing of the innovation systems?

12. Investigation strategies One field development process, the first in the Barents Sea Analysing the contracts, the upstream functions of the construction Selected 60 important North Norway supply enterprises in the Contract data base Interviewing enterprises, analysing processes and systems

13. Characteristics of the sample These enterprises has contributed to that enterprises registered in Northern Norway were secured 9,3 % of the national contract values for Snøhvit Enterprises close to the LNG-plant (Hammerfest) were overrepresented

14. (i): Spin off processes Actors: Major contractors use proximity as a strategy to increase market share Arenas: Relations between contractors and operators based on formal tender- processes Systems: Contractors arrival in the north extending existing innovation systems to new areas The new satellites recruit local people from local enterprises

15. (ii) Local enterprises enter the established petrobased innovation system Actors and Arena: Local enterprises are taken over by established contractors of the entering innovation systems System: The local based Innovation systems in the north changes and extends through the connections Local enterprises becomes connected to vertical innovation systems Local innovation systems are overtaken and governed by actors outside the local areas

16. (iii) Local enterprises in the shadow of (i) and (ii) Actors: Local enterprises connected to the entering enterprises by coincidence System: No specific connections to petro innovation systems developed, but to a larger degree connections to the growth in public sector

17. Conclusions – political challenges The regions training camps for operators and global contractors Process (ii) probably the most promising in short the term, but challenge power relations and decisions on if/and when fields should be developed Process (i) can have long term impacts Is process (iii) only a brake?

21. Conclusions: Developing Innovation systems in the wake of the oil industry in the north That North arrived latest “to the mill” important to explain connections and obstacles for developing of the innovation systems (i.e period of time) Strategies to handle geographical distance well developed – creates few horizontal connections But, Process 1: Local employees becomes integrated in existing innovation systems

22. Conclusions… Process 2: Local innovation system changes and is governed by actors outside Process 3: Local enterprises connect to innovation system outside petroleum. Growth in public sector more important.