4.Sustainable Economy in Trondheim

In the City Resilience Index, the economic and social dimension is related to the organization of cities that include how social and economic systems enable urban populations to live peacefully and act collectively. To explain more about the sustainable economy, we have chosen two indicators from CRI: Diverse Economic Base and Attractive Business Environment.

1.2. Economy of Trondheim

Norway has a very high standard of living and has a strongly integrated welfare system. The growth rate of GDP has increased from 1.08% to 1.36% in 2017 comparing to previous year (Impello Analysis, 2017). Norway has an oil industrial profile and when oil price had dropped by 70% in June 2014, it had greater impact in Norwegian economy with the increase in unemployment rate up to 4.6% (Fouche and Solsvik, 2016). However, Trondheim was not affected by this crisis as its economy is robust and flexible. The city has rich business environments which are flourishing in different sectors which make the city more sustainable and less vulnerable.

1.3. First Indicator: Diverse Economic Base

Trondheim has a wide range of industry. It is characterized by having a strong public sector. NTNU and SINTEF, large independent research organization employ 7,000 scientists and researchers, and have more than 40,000 students enrolled (Impello Analysis, 2017). The regional hospital St. Olavs located in the city is also employing more than 10,000 people providing lots of employment opportunity to locals (Impello Analysis, 2017).

Figure 42: Key figures for the technology sectors in Trondheim (Impello Analysis, 2017)

Not only the public sectors but private sectors are also becoming strong nowadays in the city. One of the missions of Trondheim is to make the city a “Technology Capital of Norway” and many technology-based companies have been established. This city is home to 675 technology companies employing 11,800 people generating more than NOK 14.4bn in revenues, according to the Impello Analysis (2017). This city has some big companies like Siemens and Statoil who has offices over here and other companies whose headquarter are in abroad but have branch

offices here. The small-scale companies like Marine industry: Norwegian Royal Salmon and small trade companies: Egon, Rema, Jordbærpikene also have influence in the economy of Trondheim as they provide lots of employment opportunities. The table above shows the economic growth of the city in technological sectors and numbers of companies established in different fields.

1.4. Second Indicator: Attractive business environment

Trondheim is one of the most technologically advanced and innovative city. It is considered as a hot spot for the start-up of new businesses and one of the reasons is the NTNU as it brings lots of young, creative and ambitious people over here who wants to establish new businesses in different sectors and people willing to start-up gets support from organization like Innovation Norway.

1.4.1. What is Innovation Norway (Innovasjon Norge):

This organization supports two kinds of works: start-ups and innovative projects which covers different fields as they want to boost businesses in other areas reducing the dependency of economy in oil sectors and make the Norwegian economy more sustainable. They also finance the start-up businesses to reduce the risks they might face during the initial phase of no market place. These initiatives have helped quite a lot, last year 70 new start-ups where established which shows the interest of people in opening the new businesses in different sector. Trondheim Kommune has also been working towards this concept and aiming at making a cultural business more effective and attention at technology sector.

Figure 43: Number of Tech Companies in Trondheim (Impello Analysis, 2017)

1.4.2. Local’s perception towards sustainable economy and starting new businesses

We had interview with two of the locals who have established new business in Trondheim and asked about their experience during the initial phase. They said it is very easy to start a new business in Norway or Trondheim as the system over here is very well organised, they can get the information in online which can be easily understood and can get financial support from Innovation Norway like they got. There is always competitiveness in the businesses but they do not feel much risk in it. They believe that if they work sensibly and follow rules and regulations any risk can be reduced. For instance, local businessman who we interviewed told us about the risk that he has gone through. He explained us that in 2009 one of his companies almost went bankrupt and they had to change the level of their activity. One of the members started to do another job and the rest of them started to work as a consultant for some time which was not part of their original idea of the business. When everything went well they go back to do what they wanted to do. He believed that a big part of doing a business is to adapt to the demand as there will be always risk and competitiveness in any field and how to cope with that depend on us.

1.4.3. Risk or challenges for economic growth

When it comes to the private sector, compare to other main cities, Trondheim has lot of small start-up companies rather than big ones. Start-up businesses face more risk than well established companies making it more vulnerable and some new companies also collapse due to low market value of their company. However, still the amounts of businesses are increasing yearly in Trondheim. This may be due to its central location and well connectivity to all over Norway which is very strategic and also it has good connection internationally; there are many international companies whose branch offices here in this city. There might be few risks like companies could be bankrupt or fail of bigger projects but the city can cope with that crisis easily and will not have much effect in the economy of city as there are many small companies in different sectors. For instance, in case of Reinertsen bankrupt, about 70 employees lose their jobs during this crisis after Aker Solutions has taken over the oil and gas business of Reinertsen AS but those who lost their job soon got new jobs in other companies and sectors. This shows although the small scale companies do not give much value to the city like that of big ones but can cope with bad times and reduce the risk. One of the risks is Oslo becoming more dominant in economic sector. Being the capital city most of the big companies have their main offices in Oslo. Local businessman who we interviewed also has a company called “Kantega” whose management was sat in Trondheim but the main office was in Oslo and they have to make daily travel from Oslo to Trondheim that increase the expenses in travelling. We asked one professor from NTNU Business School, about his perception toward the sustainable economy of Trondheim and he believes the city has sustainable economy due to the richness in business environment and investments are happening in different sectors which are not based on oil and gas industry. One of the contributing factors for the sustainability is the well connectivity of city with other regions or abroad that attract many people to come to the city with

innovative ideas and start new business and strong public sector as government of Norway is investing in lots of new technology and research sector which is conducted by NTNU.

1.2.1. Work Work

One of the projects to support the startup business and small companies is Work-Work which is an incubator providing both financial as well as workspace for them. It is a co-working space for small and medium business, students and freelancers which was established two years ago. At first it was related to gaming industry, space for a bar and showcasing game culture and building offices on top. But the concept of the hub has been changed with the time, become much broader and the main goal of this hub is always to make people come together, share and discuss their ideas. The most interesting part of this space is that they have work, fun and relaxing space together that attracts people to come over this place. This has workspace and offices at first floor, cafe and gathering or meeting space at the ground floor and games and party in the basement. Discussing with the founder of Work-Work we get to know that one of the main challenges for them is to keep on maintaining same interest among the people. The start-up businesses are always vulnerable as they do not have a market value in the initial phase. This incubator is helping small companies and freelancer who are financially weak by providing workspace in low price. They also have another business called Kick-ass which they use to explore in getting touch with new projects and invest in it. They also provide free working space in ground floor with café where people can use the space as a meeting place. This initiative helps to those freelancers who works from home and want free space just for having meeting or discussion with their client. Companies also get space for showcasing their project ideas and promote their business that helps to recognition in market. This initiative of Work-Work has given emphasis on promotion of business environment and trying to help in reducing the vulnerability for the start-up businesses through their goal. One of the long term plans of them is to make this meeting point for students, industry and real world to discuss the new ideas. They are trying to collaborate with student communities who have innovative and creative ideas. This project has get much more attention among people and people from other region are willing to have similar project in their community.

1.3. Project Idea: Business Incubator that attracts international students

1.3.1. What risks does it tackle? And why is it important?

In our discussion, we have showed that while it is true that Innovation Norway and other staterun institutions are trying to finance new businesses in order for them to compete in the market, there are still other risks that need to be tackled. New businesses in Trondheim need more cheap working places where people can interact and push their ideas forward. Moreover, we have also tried to assess Trondheim’s connectivity with the world. While Trondheim has quite good connectivity because of a lively airport and the presence of many international companies in the city, there is still a risk that the city cannot increase its international competence. Most cities that have well established universities are usually well connected with the world because of the cultural and economic relationships that their international alumni build. Trondheim does not seem to be doing very well from that angle and that is not good for a city that dreams of competing with other cities in Norway and the world. Our idea to tackle both abovementioned risks is to establish a new business incubator in the city that attracts international students. This incubator will bring more dialogue space for new businesses and include international students in long term activities in the city. We have discussed this idea with Marius at Work-Work and he said that there is high demand for such places especially in Trondheim where many students live. He also mentioned that social places to discuss ideas are needed more than ever because it is thought that technology can increase communication, but in fact today we are lacking social interaction that can push business ideas forward. We have also talked with Tyler Stewart, the president of the International Student Festival in Trondheim ISFiT and he said that there should be efforts to unlock the potentials of international students. These students can provide business ideas built in Trondheim with international competence.

1.2.1. Short Term strategy to apply the project

In the short term, the best way to start promoting such project is to contact all existing incubators in Trondheim and other institutions that supports start-ups in to learn from their experiences. After that, it is also needed to start advertising for the project by doing campaigns in the city scape and on social media.

1.2.2. Long Term strategy to apply the project

Authorities need to give special treatment regarding immigration and residency for international students who wish to build long term business ideas in Trondheim, otherwise many people will not be motivated to work with international students in such an incubator. Real strategies from the municipality and the Norwegian Directorate of immigration (UDI) should be implemented to make people feel that they can move easily from and to Trondheim.

1.2.3. What are the Limitations?

Among the limitations are two issues that were also mentioned by Maruis from Work Work and Tyler, the president of the International Student Festival in Trondheim, respectively. First, there are many open office spaces in Trondheim which are not necessarily incubators, but they can also be seen from that angle. This might discourage public authorities from supporting our idea, although an incubator is not only about empty free spaces. Second, the value of international students is rarely seen as important as our project is proposing. There are examples in the city where, especially at Stundentersmafundet (The Student Society), where even the most open minded Norwegian students are still not able to attract international students.