Research & white papers

Norway faces a fundamental, structural choice in its industrial policy. Over the past three decades, the country has built a supply-driven innovation system that prioritises ideas and rewards activity over results. The result: close to 4,000 early-stage companies, roughly 100,000 people engaged in innovation and R&D, and nearly NOK 100 billion allocated to it every year — yet fewer than 1% of these companies ever scale.

Experience from nations such as Israel, Sweden and China shows a different logic is possible: innovation organised around specific needs — defined by national tasks, industry and customers — rather than around individual ideas in search of a market. Entrepreneurs, researchers and capital become instruments in an orchestrated process, not its starting point.

Norway has too few human resources for everyone to pursue different ideas in different directions. The state's role is to secure an architecture for innovation and entrepreneurship where the effort delivers a high return for the nation.

This is not a new idea in a Norwegian context — it is the same logic that built Norwegian hydropower, oil and gas, the maritime sector and aquaculture. In each case, the challenge was clearly defined, and the state, industry, entrepreneurs and capital worked in a dynamic mix of cooperation and competition to solve it.

A new geopolitical reality

Europe is losing industrial weight at the same time as it needs stable energy, critical raw materials, advanced manufacturing capacity and reliable technology supply chains — all areas where Norway holds structural advantages few other European countries can match. Defence, industry and innovation are converging: NATO and the EU are pushing member states not only to raise defence budgets, but to build industrial capacity in munitions, surveillance, autonomy, cyber and critical infrastructure. That is, in effect, a renaissance of demand-driven innovation.

Why Norway isn't scaling

• A linear, idea-centred logic. Support schemes are built to walk a founder from idea to commercialisation — copying a "lean startup" logic well suited to short-cycle, consumer software, but poorly matched to capital-intensive, industrial B2B value chains with long development cycles.
• Absence of demand-side steering. In Israel, China and (to a large extent) Sweden, large companies and sectors formulate long-term needs that pull entrepreneurs and capital toward them. In Norway, entrepreneurs present ideas and hope a customer eventually appears.
• Large companies without an industrialisation mandate. Norwegian state-owned and large private companies act largely as procurement organisations optimised for mature, competitive markets — not as anchors for external innovation, as their counterparts do in Sweden and Israel.
• A fragmented toolkit. Innovation Norway, Siva, the Research Council, regional schemes, cluster programmes, incubators and accelerators each run their own logic, application process and goals — all built around the idea that innovation starts with a project to be assessed, not a problem to be solved.

Four national models

• United States — deep capital markets and a strong research base drive supply-side innovation with remarkable speed, except in defence, where demand-driven, state-orchestrated development has powered much of the digital revolution.
• China — national and provincial plans define which value chains to build, mobilising state enterprises, infrastructure investment and selective market access; China now holds a leading position in 15 of the world's 20 largest industries.
• Israel — the Yozma programme (1990s) replaced idea-support with problem-support: the state co-invests 50% into thematic venture funds without taking a return, giving investors double the upside and half the downside, while industry and defence define the problems worth solving.
• Sweden — long-term, competent industrial owners (the Wallenberg sphere among them) coordinate closely and with high trust with the state on major technology programmes, from automation to defence.

Six principles for a new Norwegian industrial policy

• Demand-driven innovation system — shift the centre of gravity from funding ideas to solving strategic problems.
• National industrial priorities aligned with competence — choose a small number of areas where a global top-3 position is realistic, and coordinate research, education and industry behind them.
• Strategic capital as a risk-sharer, not a lead investor — inspired by Yozma, the state's capital should de-risk private investment, not replace it.
• A mandate for large and state-owned companies as innovation engines — differentiate innovation risk from mature operations, and reward leadership that builds new value chains alongside profitability.
• A simpler, more consistent toolkit architecture — fewer, larger programmes with a clear line from research through piloting to scale.
• A body for mission-orientation and strategic direction — a small, technocratic, non-politicised function that sets direction without micromanaging outcomes.

The paper's central claim is that Norway's innovation capacity is limited — and that the task is not to expand or shrink the state's role, but to make it more targeted: a state that sets strategic direction for a small number of priorities, defines the problems that matter, and builds small, competent, results-oriented environments to solve them, while commercial decisions remain firmly in the hands of the market.

This is a condensed, English-language summary. The full paper — with sources, case studies and detailed policy recommendations — is available in Norwegian as a PDF download above.

Healthcare systems worldwide are on an unsustainable trajectory. An ageing population, the rise of chronic disease, workforce shortages and soaring waiting times have pushed many systems to the brink — by 2060, 30% of Europe's population will be over 65, and healthcare already consumes 10–12% of GDP across the OECD, and close to 18% in the US. Despite three decades of heavy investment in digitalisation, these challenges keep growing rather than shrinking.

Scaling Lab's diagnosis is that the problem sits one level deeper than digitalisation, funding or care models such as Value-Based Healthcare — it is a value configuration problem. Healthcare today is built as a functional hierarchy: the patient journey moves step by step through independently governed, siloed departments, with a hierarchy coordinating the handover at every interface. That structure was well suited to managing complex workflows at scale before the digital age — but its coordination cost now grows exponentially with system load, which is why costs and waiting times keep rising faster than patient numbers.

Two things healthcare actually does

At its core, healthcare consists of two very different activities: diagnostics ("problem-finding," a value shop activity requiring expert judgement) and treatment (often a standardised, "factory-logic" value chain). Recognising this distinction — and organising around it — is the starting point for the paper's proposed alternative.

The actor-centric network model

Scaling Lab proposes shifting healthcare toward a value network logic it calls the actor-centric network (ACN): patients, physicians, nurses, labs, imaging services and pharmacists all become autonomous actors collaborating directly on a shared digital platform — rather than passive steps processed through a hierarchy. The patient is no longer a "package" moving through the system, but an actor in it. Three enablers make this possible:

• Autonomy — each actor can make informed decisions without waiting on hierarchical sign-off.
• A shared commons — a collective system for learning and information, accessible to every actor.
• Digital infrastructure — interoperable protocols, software and applications that let actors actually interact.

Why monolithic IT systems keep failing

Since around 2010, many European health systems tried to solve digital fragmentation by importing large, "complete" hospital platforms from a handful of international suppliers. The paper argues this approach was structurally mismatched to the problem: it imposed top-down technology onto existing hierarchies without the autonomy or synchronised change in organisation and process the model actually needs — producing supplier lock-in and, repeatedly, unsustainable implementation burdens. The proposed alternative is an ecosystem approach: a stable digital core combined with many modular systems that can evolve independently at the complex, diverse periphery of care delivery — paired with simultaneous top-down strategy and bottom-up implementation, rather than one imposed on the other.

This is a condensed summary of Scaling Lab's white paper "Transforming Healthcare," authored by Harald Hvidsten, Tom Lindtein and Per Ingvar Olsen. The full paper is available as a PDF download above.