The innovative opportunity matrices in the structure of the economy of and :

valiant conquistadors vs. thoughtful polar explorers

T.I. Vorobets, V.V. Oberemok

INTRODUCTION

When studying economic processes, scientists often pay attention to the results of these processes, which are the consequences, but not the cause. In the history of economic thought, there exist formulas and models that describe a specific situation, but leave many variables outside the scope, thereby failing to provide answers to key problematic questions posed by industries, sectors, clusters and the economy in general. Thanks to technology, the world has become not only global, but also infinitely intertwined. Economics is not separate from the other sciences. National economies are heavily and inextricably dependent on the history, climate, and geographic location of a country, its general mentality, and its gene pool. For example, in many nations, there is held to exist a traditional difference between the characteristics of southerners and northerners. Northerners are more conscientious, restrained, careful, practical, persistent, hardworking, and introverted, while southerners are hot, wasteful, impulsive, and extroverted (McCrae et al., 2009). The character and emotions of people who live in a certain country depend on climatic conditions and are associated with the geographical breadth of this country (Linssen and Hagendoorn, 1994; Pennebaker, 1996). For example, southern

Italy differs economically from northern , where the annual average family income in the north is 1.35 times greater than in the south of the country (McCrae et al., 2009). Temperate nations are usually richer than nations located in the tropics, and there is a negative correlation between GDP and average temperature (Linssen and Hagendoorn, 1994). This correlates with the climate economics theory, which assumes that people adapt their needs, choice of goals, the means to achieve them, and the ensuing results in accordance with viability of their habitat (Van de Vliert, 2013). Having examined the solid research connecting climate and mentality, we decided to go deeper and show that 1 the northern and southern nations have their own characteristic algorithms for constructing GDP matrices and innovative matrices of opportunities that affect GDP growth and the chain of innovative economic transformation. We believe that increases in GDP and the welfare of the country's population are already largely programmed by other prerequisites, the most important of which are history, climate, and mentality. This article will examine the relationship of innovative opportunity matrixes with history, climate, and mentality using Spain and Norway as examples of southern and northern countries.

BODY

First, we would like to expand on the concept we are developing, which is based on innovative matriсes of opportunities and a chain of innovative transformation of the economy. In our opinion, in the 21st century, the GDP matrix should be built based on the innovative potential of the country as the main source of GDP growth. The idea behind the creation of the GDP matrix is to obtain innovative products and innovative opportunity matrices, which will be formed by chains of sectors of the economy using the following algorithm. The most innovatively developed sectors of the economy are located at the edges of the GDP matrix according to the queue (for example, 1-3-5-7-8-6-4-2). In such a scheme, innovatively less developed sectors of the economy, located in the middle of the GDP matrix, have the most contacts, which give them the opportunity to gain more skills and abilities (↑: high innovative growth; ↓: low innovative growth). The most distal sectors of the matrix have fewer contacts, but in view of greater economic development, they will generate the innovative ideas and be the last link forming or receiving the end product (Fig. 1).

As a result, there is a progression (amplification) in the growth of the economic potential of the country with the advent of each new innovative product, i.e., there is an increase in new knowledge and skills (especially in the lagging sectors of the economy) with each new cycle of CITE (chain innovative transformation of economy), which leads to an increase in the number of innovative

2 opportunity matrices in the innovation aspect. Each newly formed matrix can serve as a basis for new ideas and products, i.e., the formed innovative opportunity matrix (GDP') shows the ability to grow.

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Figure 1

Algorithm for constructing a GDP matrix using the example of 8 industries

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It should be noted that the ranking proposed by us (Fig. 1) is not strict, but rather desirable, and other options for constructing a GDP matrix are possible (the 1st principle of the CITE concept); for example, a full matrix: 1-5-7-6-8-4-2-3, or a shortened one: 5-6-8-7-3. Presented in Fig. 2, the topological scheme helps to demonstrate clearly that the most economically efficient situation occurs in the 2nd case, when the incremental growth occurs according to the formula 3n, where n is every other innovative cycle. In this instance, the most favorable conditions are created (a powerful flow of cash and innovations), which leads to their constant increase during the transition from sector to sector.

This flow is created by the desire of sectors to make a profit. As a result, a new chain is being built, a new matrix leading to the formation of the next innovative product. Such a newly formed GDP' matrix

(or innovative opportunity matrix) is a derivative of the original GDP matrix, with the difference that it has a higher potential to create a certain product and can be used to create another innovative product or an improved version of the previous one.

Since in the 2nd case the chain functions both in the forward (1→3→5→7→8→6→4→2) and in the opposite (1←3←5←7←8←6←4←2) direction, any new GDP' matrix (or innovative opportunity matrix) formed can also work in both directions. This is because the initial GDP matrix

3 was innovatively growing in both directions; therefore, it will always be necessary to make small changes and implement modernization to continue producing new innovative products in both directions.

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Figure 2

Four cases of the formation of intersectoral chains on the GDP matrix and the formulas describing the incremental growth of the innovative potential of a country: 0 – the formation of a GDP matrix; I and II – the

1st and 2nd cycles of the chain innovation transformation of the economy

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4 The most realistic situation is that of the 3rd case, when the growth of a new GDP' matrix does not occur from the very edge. However, our investigations suggest that every GDP' matrix tends to include the most extreme sectors of the GDP matrix, where most of the innovations are concentrated.

The aspiration of any GDP' matrix to permeate these extreme sectors of economy in order to get the maximum profit is economically justified. It should be noted here that during the 3rd case of the CITE the middle portion (intersection) of the formed matrices grows most powerfully, according to the formula 2 n + 1 –1, and represents the ‘hot’ spot of innovations. If in the next set of cycles, the GDP matrix launches new innovative products formed within this ‘hot’ spot in both directions, as presented in the 2nd case, this will lead to an increase in the innovation potential of the median area according to the 3n formula. Cases 1 and 4, where the growth of the innovation potential is based on the 2n formula, are the least productive, but clearly show that, to obtain an innovative product, the longest intersectoral chain possible should be used, which should function in both directions with the formation of an intersection to create the maximum effect. Again, it should be noted that CITE does not force the economy to function in this way, but it clearly demonstrates how to optimize the incremental growth of the innovative potential of a country depending on the situation (the 2nd principle of the CITE concept).

It should also be noted that one of the most important properties of GDP matrices is their fractal nature. The fractality of GDP matrices is the ability of each individual segment of a matrix

(cluster, enterprise, team of employees) to repeat in its functioning and development the properties of the entire matrix as a whole and to be reproduced at different scales with inherent features at each level. Thus, while each GDP matrix has its own dimension (national economy, cluster economy, enterprise), it retains at the same time all of its inherent functional properties. The structure of the

GDP matrix is not constant and may become obsolete, thereby requiring its further evolutionary development (or adaptation). Such development may be manifested by the formation of new sectors of the economy or a significant improvement in the old ones. Each individual innovative opportunity 5 matrix (GDP') is a variant of the initial GDP matrix and is formed as the result of a chain innovation transformation based on the national economy. The total result of the functioning innovative opportunity matrices at a certain point in time forms the total GDP matrix of the country. Some scientists claim that is a misleading measure of national success because GDP measures mainly market transactions and ignores social costs, environmental impacts and income inequality (Costanza, 2007). However, in our research, we are not going to dethrone GDP because we are rather concentrated on growth than on well-being. In foreseeable future, we believe that using innovations, physical needs such as nutrition, sanitation, access to electricity and the elimination of extreme poverty could likely be met for all people without transgressing planetary boundaries (O’Neill et al., 2018).

With respect to the development of our study, we would like to note that the following GDP matrices of Spain and Norway (Fig. 3 and Fig. 4) are a topological reflection of their economic structures, developed from the data provided by their statistical agencies. Thus, the data contained in the GDP matrix is a formalization of the evolutionary path of the economies of the countries studied, which includes such special features as climatic conditions, geographical location, and national features (mentality). These features in turn affect management style, the history of political decisions, and much more that is impossible take into account using other economic models. In this study, we will pay special attention to the specific representation of the real structure of the countries’ economies to demonstrate the randomness of certain processes, as well as to present the possibility of sustainable development of the studied economic systems.

Before we consider the GDP matrix and the innovation matrix of the possibilities of modern

Spain, we will briefly discuss its history. History shows how various factors can intertwine in the struggle for economic prosperity. In addition, history has another remarkable characteristic - it frequently repeats itself. This is due in part to the fact that the climate and geographical location of a country rarely change dramatically over time, continuing to influence its inhabitants and their political 6 and economic decisions. In our opinion, the golden age of Spain, marked by the end of the Reconquista and the beginning of the conquest of America, had a huge impact on the country’s economy and development. In particular, colonization had a great influence on the spread of the Spanish language and today it is the second most common international language after English. In 1469, another event significant for the future of Spain took place: the marriage between Ferdinand of Aragon and Isabella of Castile. The union of the Castilian and Aragonese crowns marked the beginning of the kingdom of

Spain. Under its auspices, Christopher Columbus made four voyages across the Atlantic Ocean, which resulted in becoming aware of the existence of the American continents and launched the era of Spanish colonization.

Europeans were interested in finding a sea route to Asia; even at the end of the 15th century they were still unable to penetrate Asian countries by land, since all viable routes were blocked by the

Ottoman Empire. European traders were forced to buy spices, silk, and other oriental goods from Arab merchants. In the 1480s, the Portuguese tried to reach India by going around the Horn of Africa to the

Indian Ocean. However, Columbus suggested that it might be possible to reach Asia by sailing west.

Thanks to developments in navigation, studies of the Atlantic currents, and new technologies in ship construction, it became possible sail in strong wind conditions, allowing this risky idea to be attempted successfully. Columbus first proposed his project to the Portuguese King Joan II. The monarch called for a council of scientists who considered and rejected Columbus's proposal. However, in 1492,

Columbus was lucky enough to receive consent for the funds to subsidize his travel from the Spanish monarchs, Ferdinand II of Aragon and Isabella of Castile. Columbus’s personal goal was to build a new, western trade route to the East Indies (Linehan, 2008). He received this support from the Spanish crown, which saw in this enterprise an opportunity to become a leader in trade with Asia and assume a dominant position in the highly profitable spice market. In return for his efforts, Columbus was granted the right to a tenth of everything found in the new lands.

7 It should be noted that at the end of the 15th century, the discovery of a western sea route to

India seemed little more than a fantasy and was a very dangerous project, since little was known about the Earth and its size and there were no precise maps.(Atkinson, 1952). Thus, the voyages of

Columbus, as well as those of many other ambitious conquistadors (Velazquez, Cortes, Pizarro, etc.) were considered largely ill-conceived affairs in terms of feasibility. However, there were facts that promised future success. The western Portuguese islands, such as Porto Santo and Madeira, where

Columbus lived for several years, were considered the end of Europe, but the North Atlantic Current often delivered evidence of a great land somewhere to the west of these islands and their environs.

Processed wood was often found, as well as corpses of red-skinned people. Christopher Columbus, an Italian merchant from Genoa backed by the Spanish Renaissance crown, took a chance and became a brave navigator, adventurer, and conquistador. As it often happens, he did not sail to India, but instead ‘discovered’ America. This changed the world forever.

The income from the colonization of the New World was used by the Spanish crown to achieve the following political goals: reestablishment of the dominance of the Catholic Church in Europe and the dominance of the Habsburgs in European politics. This occurred simultaneously with a rapid stratification of the nobility with respect to property, as the Spanish elite became used to luxury.

However, the influx of gold from overseas did not contribute to development of the country's economy, as numerous Spanish cities remained mainly political and failed to become trade and craft centers (Jorge-Sotelo, 2019). The control of trade and handicrafts was concentrated in the hands of the descendants of the Muslim invaders, the Moors. Monetary constraints that resulted from financing wars and meeting the needs of the Сourt and the Spanish nobility led to an increased tax burden, confiscation of property belonging to 'unreliable’ sections of society, primarily Moorish, as well as internal and external loans, often forced. These actions on the part of the government made the situation worse for the population and further suppressed trade and the development of handicrafts, exacerbating the economic and then political lag of Spanish development compared with that of the 8 Protestant countries of northwestern Europe. Within two centuries, the country faced economic problems, which subsequently resulted in the loss of the conquered territories (Mexico, Venezuela,

Peru, Chile, Bolivia, and ). At the end of the 19th century, the country started a war against the and lost. At this point, the Spanish Empire ceased to exist. Its colonies located in

North America (Cuba and Puerto Rico), as well as those in the Pacific (the Philippine Islands and

Guam), came under the protection of the United States.

For a deeper study of the economic processes taking place in the structure of the economy of

Spain, attention should also be paid to the national psychological characteristics of its inhabitants. It should be borne in mind that the country is located in a remote part of Europe, has come a long way in historical and socio-political development, and its population consists of a large number of ethnic elements as the result of a long struggle with foreign invaders, in particular during the Reconquista.

As mentioned above, the Spanish consider themselves to be the representatives of a formerly great empire, which used to determine international politics. They are characterized by a psychological reversion to a glorious historical past, when Spain, having expelled pagan enemies from its territory, became the state that discovered America and began its colonization.

The most important feature of the national psychology of the Spaniards is their unpretentious, non-materialistic living conditions, focused on the priorities of moral and ideal values and supplemented at all times by the cultivation of piety, religiosity, nobility, honor, and valor. As a result of this, they have a special attitude towards work. They have formed a stable prejudice against hard work, based on ideas about its incompatibility with the nobility and dignity of man. At the same time, it is important to remember the inherent (historically) Spanish tendency to embrace adventurous methods by which to achieve the acquisition of material wealth, which became entrenched during the conquest and colonization of America. The quest for adventure has become an integral feature of the national consciousness of Spaniards. The tendency to elevate spirituality and emotionality over logic and rationalism is typical among the Spanish. The correlation of these qualities in combination with 9 other causes led to the cultural wealth and relative scientific poverty of Spain. They were also the source of Spanish creative successes in literature, poetry, dramaturgy, and painting. The most important national and psychological features of the Spanish are hindsight and the lack of both long- term planning and the development of methods for the long-term forecasting of events. These qualities combine harmoniously with unpretentiousness and indifference to material conditions of existence, as well as emotional-volitional dynamism, the ability to quickly change the attention focused on objects and activities, and a spontaneity of decision making. The hindsight of the Spaniards is complemented by their conservatism, which is demonstrated by the desire to maintain the status quo, wariness with respect to innovations, and adherence to old traditions and established principles of life and work (Krys’ko, 2002).

The prerequisites presented above are reflected in the evolution of the GDP matrix of Spain.

Our main hypothesis is that, along with the visible evolution of the country's economy, there is evolution of its abstract model, the GDP matrix, which can be conveniently displayed and studied with the help of our approach. Like organisms in the natural world, the economy must adhere to a strict rule: either adapt or disappear. Let us now consider Spain’s current GDP matrix (Fishman, 2012) and the innovative matrix of opportunities formed on its basis in terms of the history and climate of the country, as well as the mentality of the Spanish as representatives of the southern peoples (Fig. 3).

Study of the GDP matrix of Spain revealed several services that are significantly dominant in the economy’s structure. In our opinion, this is not accidental, but rather the consequence of the historical aspects described earlier in this paper: geographical discoveries, formation of colonies, and wealth accumulation in the form of one of the largest reserves of silver and gold worldwide. Such historical prerequisites made it possible to abandon the development of a vast industrial sector, which was ‘dissolved’ into other sectors. A large proportion of the innovations formed on the Spanish GDP matrix is based on such intangible assets as design, style, fashion, etc. Most of the country's industrial enterprises have similar features, which is confirmed by the study of brands such as Gallina Blanca, 10 Mango, Chupa Chups, etc. Our evidence supports the idea that this feature did not develop accidentally, and since trade and services is one of the leading economy segments, it is obvious that they form the demand for a certain style, focusing on the end user.

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Figure 3

GDP matrix and some innovative matrices of opportunities for the

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The trade sector seeks to sell the product to the end user (↑1←3↓←5↓←6↓←4↓←2↑), and the end user provides feedback concerning what he wants to buy (↑1→3↓→5↓→6↓→4↓→2↑). Situation

2, presented in Figure 2, corresponds to an increase in 3n. Meanwhile, the intermediate links in the innovative matrices of opportunities do not increase in the innovative plan. It should be noted that with a poorly developed industrial sector, it is the trade sector that has to rely mainly on such

11 innovations, where it will be more difficult to come up with the idea than to materialize it (Gallina

Blanca, Mango, Chupa Chups, etc.). The companies listed above successfully handle this task, changing insignificant but “pleasant little things” such as aroma, button shape, candy size, etc. This forms an exclusive final service for each individual consumer or set of potential consumers. i.e., clientele (Vorobets, 2017).

A more detailed examination of the history of the formation of successful Spanish brands will help to identify the relationship between their appearance and the evolutionarily formed structure of the Spanish economy. As mentioned above, despite its relative scientific poverty, Spain has its own national characteristics of CITE. A striking example is Gallina Blanca, one of the most famous food brands in the world. This is a Spanish company founded in 1936. Its founder is Luis Carulla, who invented a special machine for the manufacture of food concentrates. Sitting in the kitchen with his wife Maria Font, they engaged in the production of bouillon cubes. As we see, this innovation is mainly formed at the expense of the services and trade sectors and has formed new matrices of opportunities within the country, in particular for the development of the food industry and the production of new food additives.

Of particular interest is the Chupa Chups brand, which, in our opinion, is the classic embodiment of all the factors we describe (history, climate, mentality) that shaped the structure of the

Spanish economy. The owner of the company, Enric Bernat, made an unexpected and at the same time fateful decision. He decided that his company would produce one type of product - lollipops. Market research helped him take this step. It turned out that, at that time, no one was making candies specifically for children. The main difference between Enric’s caramel and others on the market was its form. Usually, after eating caramel, children got sticky hands, and without thinking twice, wiped them on their clothing. The caramel that Enric created was on top of a stick, and could be eaten as if held on a fork, without soiling clothes. After the name of the product was invented, Bernat faced the

12 challenge of coming up with a catchy logo for the lollipops to help them gain popularity with cosmic speed. In 1961, the entrepreneur asked a celebrated fellow citizen for help. Salvador Dali put the name

‘Chupa Chups’ in a daisy, making it one of the most recognizable candy logos in the world. As we can see, the creative potential of the producer (a candy on a stick) and the artist (a logo in the form of a flower) played a key role in this innovation. It is harder to come up with ideas than to bring them to life.

The Mango brand was conceived as a women’s clothing brand for middle-income buyers. The impetus behind the creation was the idea that women change clothes more often than do men. The key role was played by fashion designers, who are creative and can very quickly bring their plans to life, and they were successful. The creative work of Spanish fashion designers is perfectly complemented by psychological features common to the southern peoples such as the ability to quickly change the focus of their attention and activities, and a spontaneity when it comes to making decisions. At the same time, the peculiarity of the Spanish economy emerges here again - there is not a single economy sector between the designer and the buyer that would significantly grow innovatively due to such a product. Historically, Spain has attempted to borrow innovative matrices of opportunities from the industrial sectors of the economies of other countries. An excellent example is the formation of the

Spanish automotive company SEAT, the formation and development of which was influenced by the

Italian FIAT and later the German Volkswagen Group. However, in this case, the borrowing of innovation matrix of opportunities from foreign developers did not land on fertile soil (the industrial sector has always been poorly developed in Spain) and lacked managerial features, since prudence, long-term action planning, and the long-term forecasting of the development of events are not characteristic of the Spanish. As a result, this innovative matrix of opportunities failed to develop independently from the founding companies from other countries.

Thus, the economy of Spain is characterized by weak development in the industrial sector, which is offset by the strong trade sector development. A developed trade sector manages the economy 13 of Spain using the principle that “an idea is more expensive than its material implementation” and the emerging innovative matrix of opportunities does not lead to a significant increase in the innovative potential of most sectors of the country’s economy. The weak development of the industrial sector is associated with the history of Spain, when the country's treasury was replenished with wealth from the countries conquered and colonized (Buendía, 2018; Cuadrado-Roura, 2016). The desire to conquer new lands was partly due to the geographical position of Spain, as well as the mentality of the Spanish

- the desire to demonstrate honor and valor while avoiding hard daily work that would be impossible in the hot climate of Spain.

When considering the structure of the economy of Norway and its GDP matrix, we will examine the same group of influencing factors: history, geographic location, climate of the country, and the mentality of its inhabitants. The history of modern Norway owes much to the Viking era, which had a huge impact on the modern populations of the Scandinavian peninsula. Norwegian

Vikings were bold yet prudent. Being fatalists by nature, they easily took risks. The Vikings were experienced mariners, because the long coastline of their native land was ‘cut’ at many intervals by the fjords. Their boats (longships) possessed excellent seaworthiness: speed, convenience, and compactness (Koht, 1948). If necessary, they could easily be transported by land. Such vessels are excellently suited to shallow coastal waters and rivers. A peculiarity of longships was the lack of a stern, so the ship had two fores, which allowed them to change direction without turning the ship. This was a tremendous advantage in a sea full of hidden icebergs and ice. Oars were installed along almost the entire length of a vessel. Later, rectangular sails appeared, which made for better movement when sailing in fair wind. Under the proper conditions, a ship under sail could reach speeds of up to 15 knots. With such an arsenal, one could safely set out to conquer new lands and develop trade relations.

Expeditions started in the second half of the 8th century and covered the territory stretching from

Greenland in the west to the Caspian Sea in the east. At first, only separate vessels made voyages, but the fleet gradually increased, and soon hundreds of warships moved to the shores of England, 14 Scotland, Wales, Ireland, and . Vikings founded a large number of cities and colonies, including

Dublin and Normandy (Metcalf, 1979). From 879 to 920, the Vikings colonized , which became a starting point for the colonization of Greenland. They even reached North America. The

Norwegian Viking Leif Eriksson, the Scandinavian seafarer, was the first to visit North America five centuries before Christopher Columbus. In L'Anse aux Meadows in Newfoundland, the remains of a

Viking settlement from circa 1000 AD were discovered and have been dated using radiocarbon analysis. By 1100 AD, due to many internecine conflicts, the power of the Vikings had significantly weakened. At the same time, Europe was no longer easy prey (Gathorne-Hardy, 1949).

In 1905, Norway achieved the status of an independent state. From this moment on, democracy developed rapidly in the country, as the influence of royal power on the functioning of the state system decreased in parallel with the growth of the role of the Parliament elected by the people. Having been provincial and politically dependent for six hundred years, Norway’s rapid development of democratization and the ‘socialization’ of the country’s society in the 20th century contributed significantly to the development of an intense respect for individual freedom among the population.

The Norwegian respects his freedom and will never infringe on freedom of another person. The most striking example is the decision not to join the EU, which was adopted based on a popular referendum.

According to most , membership in the union would allow large European countries to force their political and economic conditions on Norway, as well as allowing them access to the country's natural resources. Freedom-loving Norwegians avoid any obligations in every possible way

(Pinheiro, 2014). They are not used to taking long-term loans from banks. Early marriages are not typical for Norwegians, since the creation of a family imposes responsibility on a person and incurs duties that, according to the Norwegian mentality, can only be carried out by people with sufficient life experience and a stable social position. Having become independent, the Norwegians have always tried to create the image of a separate nation of primordial Vikings, emphasizing their superiority over the Danes, and especially over the Swedes. Norway’s desire to demonstrate its identity and cultural 15 independence to its European neighbors is reflected in the respect of Norwegians for national and state symbols. The flag of Norway is an obligatory item in the decor of living quarters, commercial buildings, and state institutions across the country. National motifs are also present in the elements of clothing of modern Norwegians. The motifs of the state, the royal flag, and the royal crown are used in advertising and print design. This strong allegiance to national culture leads to a negative attitude towards everything ‘foreign,’ which for many Norwegians means primarily anything American or

Swedish. The stable internal political situation in the country, coupled with a balanced government whose primary aim is to solve social problems, as well as a measured and quite predictable way of life, has contributed to the specific phlegmatic demeanor and restraint common to Norwegians. The

Norwegians are not looking for quick ways to solve problems; they carefully plan any work, studying it and repeatedly discussing its features. Outwardly, the democratization of faith is demonstrated by the specific design of churches in the country, while inwardly Norwegians are less devout and superstitious than members of other faiths. Many elements of pre-Christian pagan culture have been preserved in the modern traditions of the country. The symbolism of the ancient gods is depicted on clothing and jewelry. Among young people, it is popular to wear a tattoo with the image of the

‘Hammer of Thor’ or scenes from sagas.

Historically, Norway has not maintained strong relations with European states. In addition,

Norway's continued dependence on and the occupation of Norway by German troops during

World War II have contributed significantly to the negative attitude Norwegians feel towards the

Swedes and Germans. Today, Norwegians no longer identify Germans with the image of invaders, but antipathy towards the Swedes continues to be a national Norwegian phenomenon. The Norwegians consider the nation to be of Celtic and Anglo-Saxon origin, making the Irish, Scots, Welsh, English, and Icelanders the closest to Norwegians in spirit. This stems not only from the historical kinships among the northern nations, but also from constant cooperation in labor activities, primarily and oil and gas production. In addition to the sociopolitical stereotype of ‘kindred nations,’ it is worth 16 noting that the Norwegians see the as a reliable political partner. This belief was forged during World War II, when English families accepted evacuated families from Norway, including the royal family (Krys’ko, 2002).

Cold winters, short summers, humidity, and the strong winds coming off the sea contributed to the formation of the so-called ‘Nordic character.’ The image of the ‘Nordic man’ described in works of national literature is today gradually moving away from a psychological portrait of the modern

Norwegian. The development of high technology and widespread use of the latest innovations in society have gradually reduced the number of the country's population who are dependent on harsh nature. At the same time, the development of the so-called ‘thermophilic generation’ can be observed in Norway. Perhaps the only remaining trait inherited by modern Norwegians from medieval Vikings hardened in the harsh northern climate is their persistence and perseverance in achieving their goals.

The Norwegian always strives to complete tasks, even if they seem unrealistic. A Norwegian will never be stopped by temporary setbacks or failures in the implementation of a prepared action plan.

It is this national trait that explains the inherent Norwegian passion for dangerous travel. The mentality of the Norwegians reflects the conquest of the South Pole by the Norwegian explorer Roald

Amundsen. Amundsen dreamed of becoming the first person to set foot on the North Pole. In 1909,

Frederick Cook, and then Robert Peary, both Americans, announced their conquest of the North Pole, so Amundsen switched to the Antarctic. On June 3, 1910, Amundsen left and sailed south on the

Fram, a ship designed specifically for polar travel. On the way to the Antarctic, Amundsen sent a telegram to the British traveler Robert Scott, who was on his way to the South Pole: "Fram is moving towards the Antarctic - Amundsen." On October 19, 1911, Amundsen and four other people left the

Antarctic base in Kitovaya Bay on a light sleigh drawn by 52 dogs. On December 14, they reached the South Pole, 33 or 34 days earlier than Scott's group. All of the Amundsen team members were alive and well. Scott's team, unfortunately, died; upon returning to the base, he and his four companions died from exhaustion and cold. Amundsen's expedition succeeded thanks to the victory 17 mindset, which involved comprehensive training, careful planning, knowledge of Eskimo methods of survival in the cold, reliable equipment, suitable clothing, the ability to handle sled dogs, and knowledge of skiing techniques. His great attention to detail is illustrated by the history of the shoes manufactured for the journey. In preparing for the expedition, he ordered the boots to be ripped apart and expanded so that wooden insoles would fit into them. Even the most severe frost did not penetrate through the wooden insoles and seven pairs of stockings. Amundsen also studied new materials and methods for the production of snow glasses. For his team, he chose leather glasses with a slit for the eyes, made according to Bjaaland's patent. These glasses perfectly protected the eyes, and none of the group members lost their sight due to snow blindness. Unlike Scott's tragic campaign, Amundsen's journey went relatively smoothly, without incident. Amundsen succeeded because he was well prepared, able to anticipate difficulties, and took measures to prevent them beforehand or to address them in a timely manner when they did occur. Among the outstanding Norwegian polar explorers,

Fridtjof Nansen, Erling Kagge, and Borge Ousland should also be mentioned.

The geographical location of Norway is also an important factor in the formation of national psychological characteristics. The country is an elongated strip of land with a strongly indented coastal zone, full of islands and fjords. This situation caused uneven settlement of Norwegians in the stretches of land that were amenable to building villages, made fishing the primary occupation, and contributed to the separation of peasant communities. Fishing was organized into groups, as a rule, comprising an individual family or close neighbors who had settled on distant islands or inaccessible shores of the fjords. As a result, the so-called individualist man was formed, who independently organized his labor activity. Today, Norway is still characterized by small settlements with small populations (from 100 to 1000 people), as well as separate fishing farms located separately on the islands and shores of the fjords. Thus, all the factors presented are reflected in the evolution of the GDP matrix of their state, and in Fig. 4, we consider the modern GDP matrix of Norway.

18 In the 1960s, Norway lagged behind its Scandinavian neighbors in the aggregate value of economic production per capita, as it had for decades. By the 1990s, Norway had caught up with and forged ahead of and Sweden. The discovery and extraction of oil in the early 1970s is usually suggested as the explanation (Larsen, 2006).

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Figure 4

GDP matrix and some innovative matrices of opportunities for the economy of Norway

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Of course, oil alone cannot explain Norway’s growth and resource gifts often reverse growth, making oil a curse, not a blessing (Sachs and Warner, 2001). In our opinion, Norway escaped

Resource Curse because of specific mentality of its citizens. Analyzing the Norwegian GDP matrix, it is important to note the primacy of the production and services sectors; its high development level

(with a total contribution to GDP of 69.9%), in our opinion, is an indicator of the prosperity of the

19 country in the 21st century and should be about 65-75%. This is because a developed production sector of a country provides its population with more high-tech services, including medicine and food.

Other highly developed countries with primacy in these two sectors are also northern countries such as (73.52%) and Sweden (67.5%). Thus, when creating innovative products, the following innovative matrix of opportunities will be the main one formed: the production sector will strive to sell the finished product to the final consumer (↑1←3↓←5↓←6↓←4↑←2↑), while the end consumer will provide feedback on what exactly he wants to buy (↑1→3↓→5↓→6↓→4↑→2↑).

Situation 2, which appears in Fig. 2, corresponds to an increase of 3n. At the same time, the intermediate trade sector will also grow. It should be noted that with a highly developed production sector, almost any innovative idea can become reality (Helly Hansen, Bergans, Pyrox and others). The companies listed above successfully handle this task, changing the essential parameters of products to specialize them and reliably solve the problem of the consumer. This creates the ultimate product for each individual consumer. In addition, there are a significant number of brands in the Norwegian economy (Kleven Maritime, Solstad Rederi AS, Norway Pelagic) that permeate all sectors of the economy, creating an innovative matrix of opportunities for each other (1↑→3↑→5↑→6↑→4↑→2↑

и 1↑←3↑←5↑←6↑←4↑←2↑).

When considering Norway's innovative matrix of opportunities and its well-known brands, we would like to highlight the clothing company Helly Hansen. This brand, unlike the Spanish brand

Mango, develops the production sector in addition to the trade and services sectors. This is because this company offers reliable and wear-resistant clothing for work and outdoor activities, the development of which requires experiments and new materials. Helly Hansen develops many projects with input from specialists in his field. For example, Patrol ski jackets and trousers, released in 2007, were created in collaboration with ski patrols from Europe and North America. Thus, the company's developments are tested for strength by cold, damp, wind, snow, and ice under harsh conditions. This demonstrates a ‘northern,’ i.e., thorough, approach to business. 20 Studying the Bergans facility reveals a scenario similar to that of Helly Hansen. The history of the Norwegian brand began with the improvement of the structure of backpacks and continued with the creation of equipment for use on the most difficult expeditions. Bergans backpacks were so convenient and reliable that the Norwegian explorer Roald Amundsen included them in the equipment for his expedition to the South Pole. In 1913, the was equipped with Bergans backpacks as well. Since then, in the Scandinavian countries, the word ‘bergan’ means an army easel backpack. In 1922, the British expedition to Mt Everest led by General Charles Bruce was the first attempt to climb this peak with the stated goal of conquering the top of the highest point on the planet.

Climbers equipped themselves with new Bergans backpack models, specially developed for mountain climbing. Thus, both Helly Hansen and Bergans, while each creating new innovative products, at the same time create an innovative matrix of opportunities that can amplify in both directions: both from company to client (‘broad’ innovation) and from client to company (‘narrow’ innovation, created for a specific client and group of clients). It is particularly noteworthy that in every innovative cycle, each sector of the economy grows innovatively according to its nature. For example, the sector of services will never be able to develop new materials for rucksacks, but will help it evolve by generating new ideas for the industry sector. In turn, the industry sector will never be sensitive to the needs of the individual consumer without the help of the service sector, but by making end products, it will create the basis for personalized innovations. As a result, more general innovative products will be formed in the direction of the gray arrow, and more personalized products will be formed in the direction of the black one. This is exactly what happens in real life.

One of Norway’s most important brands is the Kleven Maritime company. Its founder Marius

Kleven was an experienced blacksmith when this company was established in 1939. His practical experience and professional knowledge, along with his Norwegian industriousness and persistence, distinguished him from other masters and many specialists were unable to replicate the quality of his work. Thus, it is natural and not by chance that his first large orders were iron fishing boats. His 21 successful fulfillment of these orders subsequently allowed the company to compete for more significant orders, which established the company as a major shipbuilder in the region (Isaksen, 2018).

Today, the company is a world leader in . During its long and successful history, Kleven

Maritime has created new innovative matrices of opportunities for related industries

(↑→3↑→5↑→6↑→4↑→2↑and 1↑←3↑←5↑←6↑←4↑←2↑). One example is Solstad Rederi AS, which, based on the success of the shipbuilding industry, began to offer the services of highly qualified sailors (1↑←3↑←5↑←6↑←4↑←2↑). In its turn, the formation of Solstad Rederi AS also represents a combination of Norwegian national characteristics. It should be noted that Solstad Rederi AS has more than 50 years of experience in various shipping segments and is currently the leading supplier of specialized tonnage for the international oil and gas industry. Solstad Rederi AS was founded by

Captain Johannes Solstad in 1964. The same year, the company acquired its first dry cargo ship, the

Soldrott. The company was the first player in the transportation market, signing contracts and receiving ship deliveries from the first half of the 1970s. Solstad Rederi AS strives to be the most reliable shipping company in the world, working globally with modern ships, often in extreme weather conditions. The company is constantly evolving to maintain its leading and competitive position in the markets. As mentioned above, the business focus of Solstad Rederi AS is primarily the international oil and gas industry (Gault, 2018).

CONCLUSION

Based on the study conducted, we can confidently discuss the non-randomness of economic processes that take place within socio-economic systems. The entire economic basis, economic structure, and topological representation (GDP matrices) of a country form under the influence of environmental macro-factors (history, the climate and geographical location of a country, and the mentality of its population), the combination or interaction of which in a certain territory appear to be the basis of complex social economic structures well into the future. Our study leads us to believe that the history of a country, together with its climate and geographical location, are responsible for the formation of 22 a certain mentality among its inhabitants. In turn, the specific mentality of the residents forms a specific GDP matrix for each individual country (history + climate and geographical location of a country → mentality → GDP matrix). Thus, a significant resettlement of people in a new country can have a significant impact on the economy of the state.

Summarizing this study, we distinguish two ways of forming or changing the structures of

GDP matrices. The first one is evolutionary development, change that proceeds gradually and without significant upheaval for short periods. The second is quick and radical change, where innovative matrices of opportunities are borrowed from outside, but demand a significant complementarity of the population's mentality to function correctly. In analyzing these scenarios, we believe that the evolutionary scenario is more promising, since it forms historically and does not contradict the mentality of the country’s population. However, it takes a long time. The second scenario is able to bring about quick results, but only when the country's population has achieved the mental readiness required to rebuild their economy.

In our opinion, the GDP matrix primarily reflects the population’s mentality and, to a certain extent, the country's GDP matrix is identical to the mentality of its inhabitants. While the Spanish are essentially clever, perceptive merchants, the Norwegians are hardworking artisans. One cannot but agree that there is a significant difference between a desire to sell and a desire to do. In addition, the

Spanish have been blessed with ambient air temperatures closer to the normal temperature of a human body, while the Norwegians have learned to resist the cold. The Spanish are valiant conquistadors in spirit, and the Norwegians are thoughtful Vikings. Yet, both Christopher Columbus and Leif Ericsson were able to reach America, a difficult feat, demonstrating that in a broad sense, representatives of both countries are able to achieve their goals and prosper.

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