1.1   Productive and future proof economy

Performance

Summary

Oslo has been rated the leading region globally for managing the pandemic, and this has meant that negative effects on productivity have been more muted than in other city regions. The low rate of Covid-related deaths, clearly communicated restrictions, and less severe changes to footfall and mobility patterns, have all helped to strengthen potential appeal to investors and entrepreneurs.

Oslo’s productivity recovery can be underpinned by a growing specialisation in high-tech industries, more jobs that can be done remotely, and the momentum of its financial and business sectors. Strong macro fundamentals suggest that Oslo can emerge a winner, while others take longer to bounce back.

Highlights

Performance

  • Growing high-tech sector. Oslo is 6th among European peers for the percentage of residents employed in high-tech sectors.1
  • Highly compatible with entrepreneur demands for remote working. Oslo ranks 8th among more than 250 European regions for the share of jobs which can be done remotely.2
  • Impressive productivity growth. Since 2000, Oslo has ranked 15th among peers for total GDP per capita growth.3
  • Low unemployment. For the forecast level of unemployment following the pandemic, Oslo ranked 2nd among 24 peers.4

Influential all-round indexes

  • Faster adaptation to COVID-19. Oslo ranks as 1st globally in a study for the all-round economic and social impact of Covid-19.5
  • Maturing competitiveness. In a measure of all-round competitiveness, Oslo holds its own at 4th of 35 peer regions, or 17th globally.6
  • More equally shared prosperity. Oslo has climbed 42 places to 20th in a global study of prosperity, due to a new focus on current and future unemployment and income inequality alongside existing measures of the presence of top corporates and GDP per capita.7

Oslo’s productivity seems resilient – but pre-Covid trends require vigilance

Figure 3: Oslo’s performance compared to peers across different measures of productivity

Sources (from top to bottom): IMF, OECD, Forbes, Eurostat, OECD, OECD.

Implications for Oslo

In the next period, it will be
important for Oslo to:

  • Continue to be resilient and adaptive to economic challenges faced during recovery.
  • Support government agencies, business leaders and investors to adapt to new kinds of guidance on employment and working practices in the ‘new normal’.
  • Draw on relatively strong public finances and a robust economic policy framework to maintain a reputation for inclusive growth as challenges from the pandemic persist.

1.2   Business and investment friendliness

Performance

Summary

New data suggests that Oslo’s investment market is likely to be one of the most resilient in Europe to the effects of the pandemic. The region’s track record of having bounced back relatively quickly following the global financial crisis has helped to buoy confidence among potential investors. Liquid multifamily markets and reliance on domestic and intra-Nordic demand will also work in the region’s favour. On the other hand, regulatory barriers to cross-border real estate transactions appear to still be more established than in other city regions.

Oslo’s financial sector has matured in recent years but seems to have fluctuated more over the course of the pandemic than in other regions. In 2020, Oslo stood out as one of only a handful in Europe to have become more financially competitive, although perceptions of financial experts who are less familiar with Oslo had been slower to catch up. Into 2021, Oslo's financial sector performance has slipped, raising questions about what a new normal will look like once the pandemic has subsided, and whether it will play a global or more regional role. Data also points to other city regions being more successful than Oslo at hosting offices of top international professional services firms.

Highlights

Performance

  • More high valued global publicly traded companies. Oslo is 8th of 37 peer regions for the number of Global 2000 companies per person.8
  • More difficult for investors to buy real estate. Oslo’s barriers to real estate transaction processes are more established than in other cities as it ranks 61st globally.9
  • Other cities are globalising more rapidly. Oslo has slipped 7 places since last year in a measure of the global reach of international companies in the region.10

Influential all-round indexes

  • Favourable post-Covid investment environment. Oslo’s investment market ranks as the 8th most resilient in Europe.11
  • Inconsistently rated financial sector. Between March and September 2020, Oslo was one of the only European regions to climb for financial sector performance and perceptions among financial experts. But since September, Oslo has slipped 20 places and now ranks 70th globally.12
  • Expert perceptions of Oslo’s financial maturity remain behind. The performance and global connectedness of Oslo’s financial industry continues to exceed its reputation among global professionals, where Oslo is seen to be 14th among its 15 European peers.13
Oslo’s real estate market is likely to be highly
resilient to the effects of Covid-19

Figure 4: Map of Oslo and European peer cities’ real estate market resilience to Covid-19

Sources: Savills, JLL. Bubble size proportional to pre-Covid cross-border real estate investment (3 year rolling average to June 2020).

Global financial professionals do not yet fully
grasp the opportunities in Oslo’s financial sector

Figure 5: Aggregate rating score of cities’ financial sectors among global financial professionals, Oslo and selected peer cities

Source: Global Financial Centres Index 29.

Implications for Oslo

In the next 12–18 months, it will be important for Oslo to:

  • Make sure that Oslo communicates that it is open for business after Covid.
  • Boldly explain to global audiences what makes the region’s fintech scene tick, and the story behind Oslo’s recent success stories.
  • Ensure that more Oslo business are in a position to access green finance, deploy new business models, and operate around new ESG standards and metrics. Recognise first-mover advantages within key sectors and develop necessary technologies.