32. Norway
98% of all firms in Norway employ between 1 to 50 people. The SME definition in Norway differs from the definition in use in most EU countries. To contribute to cross-country comparison and make the Scoreboard indicators also relevant to Norway, Statistics Norway used firms with less than 250 as well as those with less than 50 employees to analyse the Norwegian SME population along the indicators covered in the OECD Scoreboard.
After three years of increase, the outstanding stock of SME loans fell in 2016 and 2017, then increased again from 2018 to 2022. The SME share of overall business lending in 2022 stood at the highest level at nearly 40%. The majority of SME lending in Norway is long-term, accounting for an average of over 80%.
Venture and growth capital investments followed almost the same trend as the SME loans. After three years of increase, the venture and growth capital investments fell in 2016 but increased again in 2017 and reached a milestone of over NOK 100 million in 2020.
Most of the equity investments for new enterprises, those founded within previous two years, are channelled to large enterprises. The proportion of venture and growth capital allocated to new SMEs has been within the range of 16% and 21% from 2016 to 2022.
The number of bankruptcies had the highest level in 2019 and the lowest level in 2021 during the 2013-2022 period. In 2019 and 2020, 2,105 and 2,093 bankruptcies were registered respectively, while the corresponding figure in 2021 was 1,449. The low number of bankruptcies in 2021 was likely a result of the government support for business that were implemented together with the temporary Reconstruction Act to remedy financial problems during the pandemic.
Mainland GDP growth has slowed during 2023 as high inflation and interest rate increases continued to weigh on domestic demand. Private consumption has weakened due to the rising cost of living, even though subsidies for households’ electricity bills and a decline in accumulated savings during the pandemic have provided support. Business investment growth has slowed.
After falling for four consecutive months, headline inflation increased to 4% in October 2023, as electricity prices edged up. Underlying inflation has also eased but remains elevated. A tight labour market is fuelling wage growth, with ongoing wage negotiations pointing to wage growth of around 5½ per cent in 2023.
Lower global energy prices are expected to weaken Norway’s terms of trade and related revenues. However, Norwegian exports should continue to benefit from strong energy demand from trading partners to replace mostly Russian gas supply, as well as buoyant energy services exports driven by higher investment in global energy production. Oil and gas investment is expected to increase in view of the number of submitted projects by the end of 2022, halting the decline in the past few years.
There was a total of 347 819 enterprises in Norway in 2021, out of which 192 146 were non-employer firms. Most employer firms were SMEs, employing between 1 and 249 employees and accounting for 99.5% of total firms with employees.
When defining SMEs as firms having less than 250 employees - the definition used in several EU countries - virtually all Norwegian firms are classified as SMEs. To contribute to cross-country comparison and make the scoreboard indicators also relevant to Norway, Statistics Norway used firms with less than 250 as well as those with less than 50 employees to analyse the Norwegian SME population along the indicators covered in the OECD scoreboard. The distribution of employees in groups of companies, however, is not obvious. Some enterprises in large groups have therefore been included in the SME population, even though they belong to groups of companies with far more employees and would accordingly be classified as large enterprises.
SME loan data are based on the Norwegian Tax Authority’s Income Statement form for non-financial limited companies and public limited companies, complemented by the financial statements reported to the Register of Company Accounts at the Brønnøysund Register Centre.
Over the decade spanning from 2013 to 2022, SME loans experienced an average annual growth rate of 6%. SME short-term loans decreased by 15% year-over-year in 2016 and increased by 2% in 2017 and 16% in 2018, while long-term loans decreased by 1% and 5% in 2016 and 2017 and increased again by 9% in 2018. In 2020 short-term loans fell by 17% compared to the previous year but rebounded in 2021 and 2022 growing 15% and 46% respectively. For the same period of 2020-2022, long-term debt grew by 10%, 2% and 8%. The growth of short-term loans in 2021 possibly reflected the effects of the government support for business implemented to limit the consequences of the Covid-19 pandemic. Preliminary figures for 2022 showed a bigger increase in both short-term and long-term loans compared to the previous year. This was probably in line with the increasing inflationary pressure along with the devaluation of the Norwegian krone NOK against, for instance, the US dollar and the euro. The proportion of short-term debt to total debt for SMEs has been on average 17% for the decade, presenting a fall to 14% in 2020. Corresponding figures for 2021 and 2022 are 15% and 19% respectively.
Most of the equity investments for new enterprises, those founded within the previous two years are channelled to large enterprises. The proportion of venture and growth capital allocated to new SMEs has been within the range of 16% and 21% from 2016 to 2022.
Bankruptcy data refers to enterprises which are in actual bankruptcy proceedings, covering SMEs except for sole proprietorships. The statistics on bankruptcy proceedings are based on information reported to the Register of Bankruptcies. Bankruptcies averaged 1 845 per year during the decade 2013-2022, peaking at 2 105 in 2019 and bottoming at 1 449 in 2021.
Note: Data for 2022 is preliminary.
Source: Charts A, B, C: Accounting statistics for non-financial limited companies and Statistics Norway’s Central Register of Establishments and Enterprises. Chart D: Intrum Justitia European Payment Index 2008, 2009, 2010 and 2011. Chart E: Register of Bankruptcies and the Central Register of Establishments and Enterprises.