KNOWLEDGE-BASED GROWTH in NATURAL RESOURCE INTENSIVE ECONOMIES Mining, Knowledge Development and Innovation in Norway 1860-1940

PALGRAVE STUDIES IN ECONOMIC HISTORY KNOWLEDGE-BASED GROWTH IN NATURAL RESOURCE INTENSIVE ECONOMIES Mining, Knowledge Development and Innovation in Norway 1860-1940 Kristin Ranestad Palgrave Studies in Economic History Series Editor Kent Deng London School of Economics London, UK Palgrave Studies in Economic History is designed to illuminate and enrich our understanding of economies and economic phenomena of the past. The series covers a vast range of topics including financial history, labour history, development economics, commercialisation, urbanisa- tion, industrialisation, modernisation, globalisation, and changes in world economic orders. More information about this series at http://www.palgrave.com/gp/series/14632 Kristin Ranestad Knowledge-Based Growth in Natural Resource Intensive Economies Mining, Knowledge Development and Innovation in Norway 1860–1940 Kristin Ranestad University of Oslo Oslo, Norway Palgrave Studies in Economic History ISBN 978-3-319-96411-9 ISBN 978-3-319-96412-6 (eBook) https://doi.org/10.1007/978-3-319-96412-6 Library of Congress Control Number: 2018951787 © The Editor(s) (if applicable) and The Author(s) 2018 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and trans- mission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. 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Cover illustration: ivind Eide / EyeEm This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland Acknowledgements First, I would like to express my very great appreciation to my thesis supervisor, Kristine Bruland, who helped and guided me through my initial research into this topic and then through the whole process of writing this book. Without her suggestions, advice, and assistance, this research would not have been possible, and I am very grateful to her. I could not have had a more encouraging and helpful mentor. This research has been implemented with the help of many people and I am thankful to all of them. I would like to offer my special thanks to my col- leagues at the Paul Bairoch Institute of Economic History at the University of Geneva, especially Sylvain Wenger, who has helped me a lot. I want to give a special recognition to Keith Smith, Olav Wicken, and Mary O’Sullivan for very valuable comments and suggestions. Archivists in Chile, Norway, and the United States have been very helpful in the search for, collection of, and copy of records. At the University Library and State Archive in Trondheim, I would like to thank the archivists who helped me with the records from Røros Copper Works and Trondhjem Mechanical Workshop. The project “Sustainable Development, Fiscal Policy and Natural Resources Management. Bolivia, Chile and Peru in the Nordic countries’ mirror” has contributed to the completion of this book. I want to thank my siblings and parents, who were a mental support through this process. My mother, Tone, my father, Per, and Karen and Erling also gave me useful comments along the way. I appreci- ate the support from all my friends very much, especially my very good friend v vi Acknowledgements Linn Brandt who encouraged and accompanied me through long hours and nights of work. Finally, I want to thank my boyfriend, Paul Sharp for his support, suggestions, and being wonderful. Contents Part I Theoretical and Historiographical Framework 1 1 Introduction 3 2 An Innovative and Growing Mining Sector 63 Part II Knowledge Development in Technologically Complex Mining: A Framework 79 3 Catching Up with World Mining: A Model of Mining Knowledge 81 Part III A Historical Empirical Analysis of Knowledge Organisations 105 4 The University, the Norwegian Institute of Technology (NIT), Technical Schools, and the Mining School 107 vii viii Contents 5 Mining Companies: Domestic and Foreign Businesses 149 6 The Capital Goods Industry 187 7 National Geological Survey of Norway 203 Part IV Conclusion 213 8 Concluding Discussion and Remarks 215 Appendices 233 Index 281 About the Author Kristin Ranestad holds a PhD in economic history from the University of Geneva. Her thesis is a comparative study of Chile and Norway, two “natural resource–intensive economies”, which have had divergent economic development trajectories, yet are closely similar in industrial structure and geophysical conditions. Ranestad is currently doing a post-doc at the University of Oslo and participating in the research project “Copper in the early modern period. A comparative study of work and everyday life in Falun and Røros”. The project explores copper production in Røros and Falun with the aim of exploring the two copper mines from a global perspective and connecting them to global mar- kets. She started a postdoc position at Lund University in April 2018 where she uses Scandinavian biographies to explore (1) the direct roles of formal education and practice for innovation and economic performance, and how this played out in different industries and (2) access to education and the historical impact of education on social mobility, and differences in this regard between genders and regions. ix List of Figures Fig. 1.1 GDP per capita 9 Fig. 2.1 Prices of selected metals 65 Fig. 4.1 Norwegian mining engineers 118 Fig. 4.2 Composition of formally trained workers recruited to mining in Norway 129 Fig. 4.3 Composition of formally trained workers recruited to the Norwegian mining sector 135 Fig. 4.4 Salaries 138 Fig. 6.1 Turbine for Røros Copper Works 194 Fig. 6.2 Drum break for Sulitjelma 195 xi List of Tables Table 1.1 Selected knowledge organisations in Norway aimed to develop knowledge for mining 43 Table 2.1 Norwegian mining products in percentage (value: NOK) 66 Table 2.2 Simple overview of challenges and changes in world mining from the late nineteenth century 69 Table 3.1 Mining 82 Table 3.2 Simple overview of knowledge used in technologically advanced mining 101 Table 4.1 Simple overview of knowledge areas and the mining engineering study programme 111 Table 4.2 The mining engineering programme at the NIT in 1920 115 Table 4.3 Workers per mining engineer and technician in Norway. Estimated career of 40 years 124 Table 4.4 Recruitment of trained workers to Løkken Works (Orkla from 1904). Year of employment 132 Table 4.5 Trained workers as share of total workers. Estimated 40 years career in mining 137 Table 5.1 Highest position acquired by the mining engineers during working career 158 Table 5.2 Multinationals, mining engineers, and potential knowledge transfer (ca. 1870–1940) 163 xiii xiv List of Tables Table 5.3 Non-exclusive list of public and private scholarships for study travels used by mining engineers 178 Table 7.1 Selected national geological surveys 204 Table 8.1 Simplified model of knowledge organisations involved in knowledge development in Norway 226 Part I Theoretical and Historiographical Framework 1 Introduction Do Natural Resources Lead to Slow Growth? Economies in which natural resource sectors account for at least 10 per cent of gross domestic product (GDP), a share of export of at least 20–40 per cent, or where such sectors represent “key stone” sectors, have been defined in the literature as “natural resource–intensive economies”.1 Their natural resource industries rest essentially on production of raw materials, such as agriculture, forestry, and extraction of metals and minerals, which make them different from countries which base their economies on manufacturing or high-tech industries. Nobel Laureate in economics Douglass C. North defined “industrialised” societies as “region[s] whose export base consists primarily of finished consumers’ goods and/or finishedmanufactur ed producers’ goods”.2 The economist Keith Smith describes natural resource–intensive economies as countries 1 S. Ville and O. Wicken, “The Dynamics of Resource-Based Economic Development: Evidence from Australia and Norway”, Industrial and Corporate Change, Volume 22, Issue 5, (1 October 2013), p. 14. 2 D. North, “Location Theory and Regional Economic Growth”, Journal of Political Economy 63 (1955), p. 254. © The Author(s) 2018 3 K. Ranestad, Knowledge-Based Growth in Natural Resource Intensive Economies, Palgrave Studies in Economic History, https://doi.org/10.1007/978-3-319-96412-6_1 4 K. Ranestad with a strong emphasis on agriculture, a small manufacturing sector with a large proportion of output concentrated in low and medium-technology sectors, and a large service sector incorporating a large social and commu- nity services element. […] Natural resources may provide a significant proportion of output, but more commonly a large proportion of exports. […] Significant natural resources may include agricultural land, timber and forests, fish, hard rock minerals, and oil and gas.3 Some of the poorest countries in the world fit this description, notably African and Latin American countries. The poor economic performance of these countries has led to the notion that natural resources directly cause slow growth and retard development.

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