Norway Has Too Much of a Good Thing

For the town of Glomfjord in Norway’s Arctic, the country’s oil boom has turned into a curse. Unemployment has more than doubled to 7.3 percent and people are moving out after solar-energy component maker Renewable Energy closed a 200-person plant in March before shifting production abroad to cut costs. “It’s an earthquake—a catastrophe,” says Per Swensen, the 65-year-old mayor of Meloey, a district of 6,600 people scattered across 755 islands that includes Glomfjord.

Norway is Europe’s second-largest oil producer, and its energy boom has turned some fishing villages into affluent towns with living costs rivaling Zurich and Tokyo. Less welcome has been the Nordic nation’s status as Europe’s most expensive place to do business. That’s hobbling the ability of towns and regions far from Norway’s oil resources to attract and keep new industries. “I would like to have a bit more than one leg to stand on today and in the future,” says Hilde Bjørnland, a professor of economics at the Norwegian Business School in Oslo. “What we’re doing now is cutting away at one of the legs.”