Understanding the role of services in the globalisation process: The case of Norway

Abstract

The article discusses the importance of services as agents of internationalisation. Services are seen as dynamic agents of change, and services and commodities are considered composite in production processes. Modes of entering the global scene such as trade in services, foreign direct investment, forming of alliances, franchising and intrafirm trade are focused on, and limits to globalisation are highlighted. Some services, particularly advanced business services, more easily fall prey to institutional and cultural constraints than others. Empirically, Norway is analysed as an arena of international services against the background of its historical tradition particularly in shipping and affiliated activities. Recently, however, manufacturing has gained in importance, mainly in exports and to a lesser extent in imports, due to the petroleum economy. This appears to indicate that export of services has lost momentum over time. The development profile in shipping is highly negative. The negative picture changes somewhat when not only the trade balance, but also investment abroad is considered. In this respect, services have grown in relative importance, notably in the financial sector and in telecommunications. When juxtaposing outgoing and incoming investments, petroleum-related services have gained an increased export and investment surplus in recent years, from a balance in the mid-1990s.