‘Americans work harder’ than Europeans, says CEO of Norway’s $1.6 trillion oil fund, because they have a higher ‘general level of ambition’
Norway’s billion-dollar man believes America’s attitude to failure is helping propel the country ahead of its European counterparts, where workers may have a better work-life balance, but are not as ambitious.
Nicolai Tangen heads Nordic giant Norges Bank Investment Management, which governs revenues generated by Norway’s oil and gas resources, with the aim of ensuring its profits are distributed fairly among current and future Norwegian generations.
Under Tangen’s leadership since 2020 and over the past decade, the $1.6 trillion fund has increasingly invested heavily in the United States instead of its closest European neighbors — and that’s not a coincidence.
America’s performance, particularly in terms of innovation and performance, is “worrying” unlike that of Europe, Tangen told the Financial time.
It depends partly on the mindset, Tangen added, and on the fact that accepting each continent is a source of errors and risks: “You go bankrupt in America, you have another chance. In Europe, you are dead,” he said.
But it goes further: there is a difference in the “general level of ambition”, he added. “We’re not very ambitious. I should be careful when I talk about work-life balance, but Americans just work harder,” Tangen continued.
The data suggests that Tangen is right, but only narrowly. According to the European Union, in 2022 the average working week for people aged 22 to 65 was 37.5 hours. The longest working weeks recorded were in Greece (41 hours per week) and Poland (40.4 hours per week). By contract, the Netherlands had the shortest working week at 33.2 hours, followed by Germany with 35.3 hours.
At the same time, data from the International Labor Organization, last updated in January, shows that the average hours worked in the United States was 38 hours per week. However, among these employees, 13% worked 49 hours or more per week, which exceeds the majority of European countries.
Additionally, countries like the UK have a legal requirement entitling staff to 28 days of paid leave per year, if you are a full-time employee. In the United States, the law does not require staff to receive paid leave. However, according to the Bureau of Labor Statistics, the average employee in their first year of employment takes eight days of paid leave.
Although he admires the work ethic of employees in the United States, Tangen made it clear that he disagrees with the extreme salaries paid to executives. Last year he said Fortune that CEOs who earn more than, say, $20 million a year are “getting richer on our behalf.”
“It’s like daylight robbery,” he added.
Norges Bank’s investment strategy has certainly been oriented towards the American trend: after all, America is home to all 7 Magnificent stocks that formed the backbone of the stock market boom and, according to analysts, will continue to do so. do it.
And the support of an institution like Norges Bank Investment Management will encourage other investors to join us. The group is one of the most powerful financial vehicles on the planet: it is the largest owner of global stock markets, controlling 1.5% of the shares of global listed companies.
The organization also owns a lot of high-end real estate, including a 25% stake in Regent Street in London and an approximately 50% stake in offices in Times Square in New York and on Pennsylvania Avenue in Washington.
Investments in the United States now represent 46.9% of Norges Bank’s investments, whereas ten years ago the United States represented just under 30% of its portfolio. Going back ten years, in 2003, the organization’s investments in America represented only 26.3% of all investments.
Conversely, in Europe, in 2003, Norges Bank’s portfolio was made up of 59.5% from European countries, compared to 28.7% in 2023.
The electoral question
Of course, like many American investors, Tangen is closely watching the 2024 presidential elections, which could shake things up.
The CEO, who as a public servant earns less than $1 million a year, said some people within the organization were concerned about the upcoming race, but added: “I probably shouldn’t say too much. We are simply investing in America in great companies for the long term. This will have no impact on how we allocate our capital. We have almost half of the assets in America, we will remain invested in America.
According to FTMagnificent 7 stocks represent 12% of Norges Bank’s stock holdings, with Tangen adding that there is “an argument for the big guys getting bigger (and) the winner takes all.”
There is, of course, a common thread between all the Magnificent 7 companies, and it’s Wall Street’s favorite phrase: artificial intelligence.
Once again, this is an area where, according to Tangen, Europe is making life difficult for itself. Tech CEOs are frustrated, he says, by the amount of bureaucracy in Europe compared to the United States.
To be sure, even those leading the way in AI in the United States are calling for guardrails – just ask OpenAI’s Sam Altman and Tesla CEO Elon Musk.
“I’m not saying it’s good, but in America there is a lot of AI and no regulation, in Europe there is no AI and a lot of regulation. It’s interesting,” Tangen added.
This story was originally featured on Fortune.com
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