This site presents an analysis of the Norwegian government's economic policies compared to a list of 35 economic policies as prepared by student Rune Nilsen with the Mike P. McKeever Institute of Economic Policy Analysis (MIEPA). This study was written in May of 2018. To read the analyses scroll through this site. To learn more about the background policies, click here
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One of the countries using the NORDIC Economic model, this study presents a detailed study of the economic policies of Norway, as written by Specialist Rune Nilsen. The ratings herein are based on the following rating scale:
5.0 Perfect Facilitation of Wealth Creation
4.0 Midway between Perfect and Neutral
3.0 Neutral Effect on Wealth Creation
2.0 Midway between Neutral and Obstructionist
1.0 Perfectly Obstructionist to Wealth Creation
[Rating scale copyright Mike P. McKeever, 2018. Used herein with permission]
RATING SUMMARY - RUNE NILSEN POLICY NUMBER RAW SCORE ADJUSTED SCORE POSSIBLE PERCENTAGE 1 5.0 15.0 15.0 100 % 2 5.0 15.0 15.0 100 3 4.0 12.0 15.0 80 4 4.0 12.0 15.0 80 5 5.0 15.0 15.0 100 6 5.0 15.0 15.0 100 7 3.8 11.4 15.0 76 8 5.0 15.0 15.0 100 9 4.8 14.4 15.0 96 10 4.5 13.5 15.0 90 11 2.5 7.5 15.0 50 12 4.5 9.0 10.0 90 13 5.0 10.0 10.0 100 14 2.0 4.0 10.0 40 15 5.0 10.0 10.0 100 16 3.8 7.6 10.0 76 17 4.0 8.0 10.0 80 18 5.0 10.0 10.0 100 19 5.0 10.0 10.0 100 20 4.8 9.6 10.0 96 21 4.5 9.0 10.0 90 22 4.5 9.0 10.0 90 23 3.2 6.4 10.0 64 24 4.5 9.0 10.0 90 25 4.5 9.0 10.0 90 26 5.0 10.0 10.0 100 27 5.0 10.0 10.0 100 28 1.5 3.0 10.0 30 29 3.5 3.5 5.0 70 30 5.0 5.0 5.0 100 31 3.5 3.5 5.0 70 32 2.0 2.0 5.0 40 33 4.2 4.2 5.0 84 34 5.0 5.0 5.0 100 35 5.0 5.0 5.0 100 TOTAL 148.6 317.7 370.0 85.9% ===== ====== ===== =====
INDIVIDUAL POLICIES - RUNE NILSEN
1. Freedom from internal control – 5.0
There is no discrimination in Norwegian. Also, the protection of civil liberties is important to the Norwegian officials as well as the people. Because of that, people can move freely and do anything they want within the legal boundaries. Norwegian people can obtain wealth and create new enterprises without obtaining permissions, excluding license permits.
- Personal Experience
2. Freedom of speech 5.0
Norwegian Constitution guarantees the freedom of speech to everyone. With this comes the right of free expression of oneself. Also, there is the freedom of the press which gives journalists the right to write what they found out. The freedom of speech is accepted by all the authorities. Article 100 of the Norwegian Constitution has granted freedom of speech since 1814 and is mostly unchanged since then. Article 142 of the penal code is a law against blasphemy, but no one has been charged since 1933, though it was upheld as late as 2004. Article 135a of the penal code is a law against hate speech, which is debated and not widely used.
3. Effective, fair police force – 4.0
There is a medium-large police force in Norway, consisting of different departments. But every town has at least one police station. Becoming a policeman requires a long education and Norwegian police men and women are generally seen as fair and effective. The Norwegian police is very fair. The crime rate is not too high and most crimes are investigated successfully. Norwegian people feel safe, also because there is a steady police presence in regions where crime rates are higher than the average like the capital.
4. Private property – 4.6
Real property in Norway, recognizes secured interests in property, both movable and real. The system for recording interests in property is recognized and reliable. Norway maintains an open and effective legal and judicial system that protects and facilitates acquisition and disposition of rights in property, including land, buildings, and mortgages.
Intellectual property rights in Norway, adheres to key international agreements for the protection of intellectual property rights (Paris Union Convention for the Protection of Industrial Property, the Berne Copyright Convention, the Universal Copyright Convention of 1952, and the Rome Convention). It has notified its main intellectual property laws to the World Trade Organization. Norway's intellectual property statutes cover the major areas referred to in the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement.
The chief domestic statutes governing intellectual property rights include: the Patents Act of December 15, 1967, as amended; the Designs Act of March 14, 2003; the Copyrights Act of May 12, 1961, as amended; the Layout-design Act of June 15, 1990, as amended; the Marketing Act of January 9, 2009; and the Trademarks Act of March 26, 2010. The above legislation also protects trade secrets and industrial designs, including semiconductor chip layout design. As an EEA member, Norway adopted legislation intended to implement the 2001 EU Copyright Directive, though subsequent court cases exposed shortcomings in the legislation.
5. Commercial banks – 5.0
The banking system in Norway is very good. It is easy, fast and efficient. Today, the banks are earning large amounts of money and are more careful to whom and how much they lend. Payment instruments have also developed at a rapid pace. After the war, cash and manual giros were almost the sole payment instruments. After a period cheques came into use, automatic cash dispensers (ATMs) were tried out as early as in 1970, and internet banking was introduced in 1996. All these innovations led to a very sharp increase in the number of transactions in the Norwegian payment system – with a transition from paper-based to electronic solutions. In the years ahead, the work to establish a common payment market in Europe will influence solutions in Norway.
6. Communication systems – 5.0
State-owned public radio-TV broadcaster operates 3 nationwide TV stations, 3 nationwide radio stations, and 16 regional radio stations; roughly a dozen privately owned TV stations broadcast nationally and roughly another 25 local TV stations broadcasting; nearly 75% of households have access to multi-channel cable or satellite TV; 2 privately owned radio stations broadcast nationwide and another 240 stations operate locally; Norway is the first country in the world to phase out FM radio in favor of Digital Audio Broadcasting (DAB), a process scheduled for completion in late 2017. 5,718,740 registered mobile cellular telephones, in comparision of total population of 5,320,045. general assessment of telephone system in modern in all respects; one of the most advanced telecommunications networks in Europe
7. Transportation - 3.8
On average each Norwegian transported themselves for 70 minutes each day. In 2008 8% of passenger transport was made by public transport; road transport is the dominant mode of transport. It had risen to 10% in 2017. In 2014 22% of travel was on foot and 4% by bicycle. The transport sector was responsible for 4.1% of the gross national product and 6.6% of employment in 2006. According to the World Economic Forum's Travel and Tourism Competitiveness Report 2013, Norway placed 83 out of 140 countries regarding quality of roads, 47 out of 122 regarding quality of railroad infrastructure, 25 out of 140 regarding quality of port infrastructure and 54 out of 140 regarding ground transport networks.
8. Education – 5.0
The Norwegian school system can be divided into three parts: Elementary school (Barneskole, ages 6–13), lower secondary school (Ungdomsskole, ages 13–16), and upper secondary school (Videregående skole, ages 16–19). Elementary and lower secondary school are mandatory for all children aged 6–16. Most basic workplaces requires finishing up upper secondary school, or at least in favor of potential workers that completed upper secondary school rather those who did not, excluding businesses who hires under-18 workers. All education in Norway is free, where also you can get living expenses covered by Financial Aid through Lånekassen when studying higher education. The financial aid also rewards their students of completion of higher education by converting loans to grants instead. Literacy rate in Norway is virtually 100% for both women and men. Throughout Elementary, Secondary and Upper Secondary Schools, the enrollment is at 99% of all youth.
9. Social Mobility – 4.8
Today, social mobility is high in Norway. Parents' income does not decide children’s income to any great extent. Economic inequality is also very small compared with other developed countries. New industries emerged that both required more education and paid well. As a result, parents may, for example, have seen that education yields a high return and therefore encouraged their children to take more education. The resultant comparative ranking of the social mobility of countries implies that Norway is a country of greater opportunity than most others. Social mobility in a society usually is expressed numerically in terms of its opposite: the intergenerational persistence of income, which is the likelihood that someone will inherit their parents’ relative income level.
10. Share of All Jobs in Small Businesses – 4.5
Norway’s business sector counts more than 267 000 active enterprises, of which a large majority (99.8%) are SMEs. In 2012, they employed more than one million private sector workers and produced about 127 billion euros in economic value added. Norwegian SMEs contribute significantly more to GDP, as compared to their EU peers (71.9% vs. 58.4%) and have a significantly higher labour productivity.
11. Freedom from outside control – 2.5
Every Norwegian is subject only to the Norwegian law. This applies also if the person is outside Norway. Even those who don’t live in Norway permanently or are visiting other countries, the law should always apply to them. For instance, if Norwegian citizens are charged with a major felony in another country, the Norwegian government would try to help that person to get out of that country and be judged in Norway. There has been several recent incidents this has happened, in Middle East, Latin America and Africa, but unfortunately not always worked to deport the citizen back to Norway right away.
12. Protection of Domestic Enterprises – 4.5
Norway imports around $79.9 billion (2017) of value and exports around $102.8 billion (2017), leaving in conclusion that exports dominates, making it safer for domestic enterprises to grow and gain income. Imports of goods with high tariffs are limited. However, import quotas with low or no tariffs on such products are granted through trade agreements (WTO, EEA and EFTA trade agreements). For products such as sugar, rice, tropical fruit, and vegetables outside the Norwegian season, there is no tariff. All developing countries have reduced tariffs on exports of agricultural products to Norway.
13. Foreign currency transactions – 5.0
Foreign currency transactions are conducted officially in commercial banks and exchange offices without any restrictions applied. Norway accepts ordinary individuals to hold foreign currency at any time. All foreign currency must be converted to the Norwegian Krone, in order to conduct business, leaving the fiscal and monetary policies effective. However, small-scale business in foreign currency is conducted on the borders and certain gift shops around the capital, and international airports.
- Personal Experience
14. Border control – 2.0
Norway shares border with Sweden, Finland and Russia, however, there is difference between security of these countries.
Norway, Sweden and Finland shares an agreement, called “Den nordiske passunionen», where the Scandinavian countries have open borders, open emmigration/immigration, and open-but-limited commerce agreement, where as for an example, Norwegians can travel to Sweden without VISA or passport, and can trade goods for limited quantity, and vice versa. For Norway-Russia, there is not the same agreement, and those borders are heavily protected from both sides, as well of need of VISA and passport to enter either country. In terms of smuggling, there has always been ongoing, as it is easier to smuggle through Sweden and Finland, as there is more looser borders, with minimal border control units and checkpoints, and aswell only have minimal random checks. For Norway-Russia, there is minimal of smuggling of typical Norwegian or Russians, the natives have advantage of smuggling, as they are not considered norwegian nor russians, leaving them to travel easier around the borders without have to have VISA or passports using snowscooters or reindeer to travel on land without roads.
- Personal Experience
15. Currency – 5.0
The krone was introduced in 1875. In doing so, Norway joined the Scandinavian Monetary Union, which had been established in 1873. The Union persisted until 1914. After its dissolution, Denmark, Norway, and Sweden all decided to keep the names of their respective and since then separate currencies. The currency is only issued by the central bank, “Norges bank”. The currency sways usually 1 USD= 6 to 8 Norwegian Krones, depending on government commerce policies.
16. Cultural, language homogeneity – 3.8
In 2018 there is 5 295 619 people living in Norway of whom 746 661 are foreigners. That is a percentage of about 14%. Most foreigners adapt to Norway, but do not usually admit to be Norwegian, and there are some minority groups like Muslim communities, that still keep on with their own culture and customs. There are no conflicts about that and there are many efforts that people learn more about different cultures. There is only two official language in Norway, which is Norwegian Bokmal and Norwegian Nynorsk but most people learn English and can speak it as well. In rural areas there is almost no diversity of culture whereas some urban areas can be seen as hot topics of discussion for politicians and communities alike.
17. Political effectiveness – 4.0
By Norwegian standards, the various tentacles of government are infamous for bureaucracy, rigid rule-riding, lack of common sense, incompetence and endless delays. There aren't any countries around that have a radically better functioning public sector than Norway. Some may be better in one regard and worse in others, but overall things are pretty good here. Notably, corruption is very low. It is so low that it doesn't pay to assume you can bribe your way. Unless you are already friends with one of the few corruptible public servants, you will just hurt your case trying. So this saves us from a lot of blatant misuse of public funds.
On the other hand we do have "pork barreling", public projects that benefits local voters but are not the most worthwhile on a national scale. So there is still some bad allocation of resources even without the corruption. To add further chaos, a change of elected government can cause a half-finished project to be put on hold indefinitely. Not that this is unique to Norway, unfortunately not.
The Nordic countries all have a high tax base, which means more money to throw at the problems, but Norway even more so because of the oil industry which pays really well (or did until 2014). When government has more money, it can appear more efficient than it actually is. But it also means they can occasionally afford to actually hire more competent people. Although like in most other countries, public sector tends to have somewhat lower salaries than the private sector. The education level in the Nordic countries is quite high, and specifically literacy and the percentage that completes secondary education is very high. Additionally, digital literacy is high - computers and advanced telecommunications are widespread in all layers of the population, which makes it easier for public sector to computerize and also to communicate with their citizens over the Internet. The Tax Directorate are famous in a positive way for having eliminated most of the work with the tax return for common workers, to the point where most of us just get an email and text message to check our tax return on the Internet. Doing the taxes typically takes about five minutes unless you run your own business and do your own accounting.
On the other hand, you have the occasional computer system gone horribly wrong, like the NAV, a politically motivated fusion of government agencies dedicated to retirement, disability, support for single parents, unemployment and welfare. The merger was rushed through without time to synchronize the computer systems, and investment in new systems failed spectacularly, leaving one of the most important facets of government exposed to public mockery. Years later, the situation is still awkward, and it is now too late to put things back the way they were. So by Nordic standards, there is definitely room for improvement. But by global standards, public services in Norway are indeed quite good, and especially from the point of view of those who need them the most.
18. Institutional stability – 5.0
In most of all organizations, people er are elected to serve for a period of at least 2 years. The prime minister does not have any terms limit, but however, there is general elections every four years to stay in office. Usually there is not much changes in government as the people are mostly satisified with the elections, so it it very normal that prime ministers stay more than one term. Norway got somewhat conservative culture, and does not mind little to no change when it comes to government or businesses.
19. Honest government – 5.0
Norway ranks among the least corrupt countries in the world, and business is conducted with a high level of transparency. Corruption does not represent a constraint to trade or investment, and administrative corruption and petty bribery are almost non-existent. The Norwegian Penal Code criminalize active and passive bribery, trading in influence, fraud, extortion, breach of trust and money laundering. It applies to anyone who is registered in Norway and carries a penalty of up to 10 years’ imprisonment, even if the act is committed abroad. A company can be held criminally liable for corruption offenses committed by individuals acting on its behalf. Facilitation payments are prohibited, and gifts and hospitality can be considered illegal depending on their value, the intent and benefit obtained. These practices, however, very rarely occur. Law enforcement activities and the legal framework for combating corruption are very strong, and anti-corruption laws are enforced. There are no reports of official impunity . Norway’s economic crime-fighting unit, Økokrim, has proven itself effective in investigating and prosecuting corruption in Norway and, to some extent, abroad.
20. Common laws – 4.8
The Constitution of Norway (Grunnloven ) was adopted in 1814 after the dissolution of the union with Denmark. The present Norwegian legal system has a purely national foundation, but it is closely related to the legal systems of other Nordic countries, which have largely the same traditions in terms of legal history and legal policy. Influenced by other legal systems, and through Norway’s participation in the European Economic Area , also the European law. Norway has a statute law system with the highest authority being the 1814 Constitution. Norway is a member to the EEA and under the EEA it is bound by a large number of regulations adopted by within the EU. All citizens are protected equally of Norwegian law, and most court cases go through District courts, which is the lowest part of the court system. Some cases would go higher up in the system, such as Appeal Courts and final, Supreme Courts. If you are accused or arrested in a criminal case, you have the right to get a lawyer for free, paid by the government.
21. Central bank - 4.5
In Norway, there is only one central bank, “Norges Bank”, where it was established 14 of June, 1816, does all the monetary policies, in common goal to keep inflation stable and low, and is being independent of political control, as all the Executive Board gets chosen by the King of Norway, after decision of Council of state. It also controls country's commerical banks and bank services, government debt, liquidity management, and pension, as of many of its services provided.
22. Domestic budget management - 4.5
In 2017 the Norwegian revenue totaled $228.05 billion and there is total expenditure of $209.23 billion, excessive of nearly $20 billion, which make up 4.8% of the GDP. The inflation rate was around 1.88% that same year.
23. Government debt - 3.2
In 2016 the Norwegian's government debt made up to 35.7% of the GDP with an increase in 2017 up to total 37%. The government is always trying to decrease the countries debt, however, in recent years, it has failed. Compared to other countries, Norway's debt would be average.
24. Economic statistics - 4.5
Accurate and plentiful statistics produce increased awareness of business opportunities. Poor statistics increase risk and reduce investment. High scores go to countries where plentiful statistics are published, provided that independent observers rate them as accurate.
Statistics Norway, or “Statistisk sentralbyrå” is the Norwegian statistics bureau, that gives 1000's of statistics out every year on their website. They are referred to as highly accurate and trustworthy.
25. Protection of public health and safety - 4.5
Norway's rate of tuberculosis is 6 per 100 000 population per year, which is lesser compared to France, another European country, in which their case is 8,2 per 100 000 population per year. Norway got also low infant mortality, compared to France, Germany and Estonia, with 2,3 per 100 000 population. In Norway, almost everyone got health insurance through banks or jobs. You can attain Frikort, which will cover all medical bills for as long as you need. Most of the common diseases are taken by vaccines, where the infants and kids get free shots at school, and the costs are low for any types of vaccine.
26. High wage policies - 5.0
Norway is ranked number 3 in highest GDP per capita(73,615 USD – Est. 2017) in the world, and therefore automatically have high wages. The lowest minimum wage (unskilled workers) is around 21 dollars per hour. We have really good standards and we have good high wage policies, making it more than enough to afford to buy consumer beyond basic living necessities. The work culture in Norway is really hard to satisfy and therefore a lot of employers give out very good deals on the contracts and almost always vows to keep them that way. There is really few incidents that would require a complete strike (both private and public sectors), but this could be settled with either bargain with Unions, or a lawsuit(In cases of broken agreements).
Personal Experience working for Shell Retail(Gas station service)
27. Environmental protection - 5.0
In the country, there is not really necessary to maintain the environmental protection laws, as part of the society does feel the need to protect and preserve the natural environment and it's value of their resources. All beverage bottles/containers are under something called «Pant», which was introduced in 1902, to help reduce the plastic and glass waste on the streets, by implementing a cost for the bottle itself, so by buying soda or beer, or any other beverages, the stores automatically insert between 1 to 2,5 Kr fee (0.13 USD – 0.32 USD), and once consumed the beverages, you can return them to the same stores or any other stores in the country, to a specific delivery machine that would refund you the amount you paid for the container.
When it comes to cars, we have something called EU-Kontroll, where you car gets checked every other year for both security reasons and environment safety, and it is extremely illegal to drive a car without that control, and there is even own «car police» that drives around and looks and stops cars for checking if they feel they violated that control law. If caught violating that law, you could literally lose your license plate on your car, as government officials would take it off physically, and could affect your driving license as well
In Norway as well, we are getting even more stricter recycling policies for private homes, where you have to recycle in categories of food waste, plastic, metal and glass, paper and paper waste, and residual waste. If these recycling policies were to be ignored the government can actually fine the residents of the recyclable waste, if reported by garbage collectors.
28. Strong army - 1.5
The Norwegian Army has in recent years demilitarized it's forces to cut the budget of the army, making it in reality more of a support group in coalition wars (such as UN forces in various countries) to maintain peace, rather than attack/defend force. «Forsvaret» or The Defense, is the most active part of the Army, in which it's only mission is to protect Norway from attacks, both external and internal attacks. This is however more of a misconception, due to the fact «Forsvaret» cannot hold against an actual external full force invasion, but to stall enough time for allies(NATO) to come to rescue. The Defense can however withstand internal attacks, such as revolutionaries or insurgency, but after the World War 2, there have not and there is not forecast to be any attacks on Norway any time soon, and possibly not even in this century. The current recorded budget(2016) is to be 1.62 % of the total GDP of the country.
29. Foreign trade impact - 3.5
For 2016: Import + Exports = 164.42 billion USD, 40,6 % of the total GDP. As of import, we mainly import goods such as machinery and equipment, chemicals, metals, foodstuffs , and we export mainly petroleum and petroleum products, machinery and equipment, metals, chemicals, ships, fish. Norway in itself is not really dependent on foreign trade despite almost half of the total GDP consist of it. We usually import what we lacking, but not necessarily not have, and with full cut, Norway would still be up and running without going bankruptcy. Norway also provide foreign services such as IT development, which is one of the biggest markets in Norway at this time.
30. Management of foreign currency budget - 5.0
For 2016: Exports of 92.4 billion USD and imports of 73.02 billion USD. Norway usually maintaining their imports higher than their exports in order to secure an currency surplus and surplus in the economy, in case of future increase of exports.
31. Layers of collective action - 3.5
Norway is one of the countries that are very proud of it's democracy, and very respect the ideology and take seriousness of election of school boards, city councils and volunteer groups. Most funding happens through private and company investment, and most are not in need for central government funding. Government-involved businesses such as school and volunteer groups(Red Cross, Doctors Without Borders, etc.) are already funded by the government, as a subsidy, but do not actually involve in the political aspect of the businesses. Every layer and layer's leader are elected by the people, and so the decision the layers have, would come from the people itself, and would come up with solution. If somehow the highest layer comes in dispute with the lower layer, there would be protest and would elect different leader or a whole different layer to solve and please the lowest layer. With small population in the country already, there is limited leadership seats, creating competition with increase effect of accomplishment.
Personal experience from involving into politics(Local News, local culture and value, and local society)
32. Pro business climate – 2.0
Theoretically, it is a good thing to own a business, if comparing to other nations, however the government in Norway does not actually encourage the Norwegian people to take part of business ownership, but does not discourage either, leaving it as a blank option to potential take. There is a few business colleges/institutions such as “Norges handelshøyskole”, “Handelshøyskolen BI”, and “NTNU Handelshøyskolen” but all these are privatized and therefore not supported by the government when it comes to encouragement.
The government encourages taking part in various workforce in different work sections, such as petroleum engineering, office work and IT-service. In Norway, most businesses are franchised coming up with the best deals when it comes to expenditure, making it very hard for private-owned businesses to start up due to the high cost. Current popular private-owned businesses would be in the restaurant, and IT section, but there is already heavy competition in those markets, leaving almost no gain without proper leadership.
- Personal Experience from school studies(Study Line of General Competence with Marketing and Entrepreneurship)
33. Government enterprises - 4.2
There is many government enterprises in Norway, such as «Flytoget», «Nationaltheatret», and «Norsk Tipping», and it has stayed that way for many decades, due to high income from these enterprises. Mostly government enterprises are whole owned but in recent years slowly developing to privatization, however certain enterprises will most likely be whole owned because of potential fear of corruption and movement of money value out of the country in certain sections. «Norsk Tipping», or Norwegian Gambling enterprise is one of the examples to be whole owned due to the monopoly over the entire gambling section in Norway. Mostly enterprises involving government does not entirely being subsided, due to the fact the Norwegian government subsidies with expectations of income and investment return.
34. International security agreements – 5.0
Norway is a really small country with small population compared to rest of the countries, and as well decreased budget of the Norwegian army, in which the total of budget is apx. 4.7 billion USD(from 2017). As part of the budget cut, the Norwegian armed forces has decreased amount of troops and military vehicles that are active (such as APC, tanks, frigates and other heavily armored vehicles and carriers), therefore rely heavily on their security agreement with NATO, in case of foreign external attack. Norway has been part of the NATO since 24th of August 1949, and been part of multiple tours with NATO forces around the globe, and has gained reputation and good favors, as well as former prime minister of Norway, Jens Stoltenberg, has taken office in NATO as Secretary General, which bonds Norway with NATO even more.
https://forsvaret.no/en/facts/the-armed-forces-in-numbers/budget - Exact numbers
https://no.wikipedia.org/wiki/NATO - Clarification of exact date
35. Protection of domestic enterprises from government mandated costs – 5.0
Norway is a safe and easy place to do business, ranked 9 out of 189 countries in the World Bank’s Doing Business Report, and 5 out of 177 on Transparency International’s Corruption Perceptions Index. Norway is politically stable, with strong property rights protection and an effective legal system. Productivity is significantly higher than the EU average, but a rising cost base is a challenge going forward. With unemployment at 3.5%, the tight labor market is a challenge for some industries.
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