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Social innovation in local development:

Norwegian national context

Local democracy is strong in Norway, and municipalities and counties have a well-established responsibility for providing solutions to social problems. In recent years however, focus has shifted to SI and SE largely in response to rising costs and shrinking budgets in the social welfare sector. Despite this increased attention, it is important to acknowledge that both SI and SE are relatively new concepts in the Norwegian policy context and knowledge of practical examples, particularly those occurring outside of urban areas, are still quite limited.

Funding and governance of Norwegian services

Norway’s system of local government has two tiers and is currently made up of 428 municipalities and 19 county authorities. Both the municipalities and the county authorities vary significantly in size, topography and population and more than half of the municipalities have less than 5,000 inhabitants. Regional reform, proposed in April 2016 and expected to be implemented by 2019, will see the establishment of larger municipalities with a stronger capacity to take responsibility for new duties and tasks. Norway has a decentralised approach to social services, with the municipalities and counties as the primary providers. Municipalities are responsible for services for elderly people and people with disabilities, primary healthcare, primary and lower secondary education and kindergartens. County authorities’ have broader responsibilities including regional development, provision of upper secondary education, maintaining county roads and public transport, culture and environment. Unlike in other Nordic countries, for example Sweden, where municipal taxes are collected locally and stay in the municipality, Norway’s taxes are collected by the central government and then re-distributed. In recent years, municipalities have begun to focus on ways to provide better services at a lower cost.

Key issues in remote and sparsely populated areas

Norway is the Nordic country with the largest proportion of its population living outside urban areas. This is, at least in part, attributable to Norwegian regional policy which has a long history of prioritising balanced regional development, both in terms of employment opportunities and settlement patterns. The focus has been on strengthening the growth potential of the areas outside the largest urban areas, mainly through economic planning and physical investments (e.g. tax incentives for people and businesses prepared to move to the northern parts of the country). This is not to say that Norway has avoided completely the challenges faced by rural areas in other Nordic countries – the aging population, outmigration of young people are a big issue and the regional development budget has been reduced by approximately one third over the past three years. Rurality in the Norwegian context is also more complex from a socio-economic point of view. Many of Norway’s main industries (oil and gas, and fishing) are located on the coast, meaning that, in discussions of inequity, coastal versus inland is a more useful distinction than the traditional urban-rural divide. Since 2013, the focus of the regional policy in Norway has shifted to labour market issues such as promoting innovation, competitiveness and knowledge infrastructure.

Social innovation in Norway

The growth of SI and SE in Norway has primarily been driven by individuals, enterprises and investors. There has also been some political interest in the field, as demonstrated in 2011 by the establishment of a grant for social entrepreneurs targeting their initiatives at combating poverty and social exclusion. Overall, the field can be characterised as emerging, with steady increases in the number of enterprises describing themselves as social entrepreneurs, strengthened commitment from political authorities and increased interest from researchers and educational institutions. Social entrepreneurship is the more widely recognised term in Norway today, and is referred to more frequently in policy than social innovation. When it comes to public sector innovation, the focus in the past has been on technological innovation. Increasing quality, reducing costs and overcoming barriers related to distance in the healthcare field has been of particular interest (Dons Finsrud, interview 2016). More recently however, national and local governments have become increasingly interested in innovation as a means of finding solutions to social problems and improving the design and delivery of public services. As in other Nordic countries, promoting increased collaboration between the public sector, the private sector and voluntary organisations is central to this the agenda.

Social innovation in local development

At this stage, the interest in SI and SE is largely concentrated in urban areas. Despite this, it is possible to find examples of mechanisms that have been introduced to support the emergence of SI in rural and remote settings.

  • Innovation Norway, the government agency charged with promoting innovation, provide risk loans targeted towards projects in rural areas that have trouble obtaining financing through the private sector because of the perceived lack of security. Evaluation of the scheme demonstrated that the risk loans are profitable and that the initiatives they have financed are valuable to the regions.
  • The Merkur programme, financed by the Ministry of Local Government and Modernisation, aims to ensure that residents in rural areas have access to a nearby grocery store stocking good quality produce. The programme works with smaller grocery stores in rural areas to find opportunities for them to take on additional services (e.g. post office facilities), that increase their profitability and provide members of the community with better services.
  • The Alliance for Innovation (Innovasjonsalliansen) was established by KS, the Norwegian Association of Local and Regional Authorities (Kommunesektorens organisasjon) in 2010, and aims to promote SI and serve as a platform for debate and solutions on different societal challenges concerning welfare. Members of the alliance are municipalities, counties, volunteer organisations and state actors. 


Download the full National Contexts report including a complete listing of sources cited


Page last updated September 2016.