On the Re-Emergence of Small Scale Production: The Norwegian Case in International Comparison

Several studies on industrial restructuring point to the phenomenon of a changing size structure in many western economies. This article first rewievs international studies along these lines and then analyses developments in Norway from 1970 to 1990. For manufacturing, a pattern similar to those observed in other countries is found: from the middle of the 1970s there has occurred a slight shift from concentration in bigger establishments to growing employment shares in smaller establishments. Detailed analysis furthermore reveals that the shift towards smaller units has occurred in most sectors of manufacturing. When explaining this shift, however, the conclusion is the opposite of popular views emphasising the dynamism of small firms. The data points very clearly to a general industrial decline in Norway as a main explanation for the change in size structure. Rather than being attributed to the strengths of SMEs, the growing share of SMEs may be interpreted as a result of industrial weakness.