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Norway’s “billion-dollar man” Nicolai Tangen, who manages Norway’s $1.6 trillion sovereign wealth fund, says America’s success over Europe comes down to one simple factor: Americans work harder. Tangen, who oversees Norges Bank Investment Management’s massive investments, believes the American work ethic and resilience in the face of failure have given the U.S. a significant advantage in innovation and economic growth over its European counterparts.
“Americans just work harder,” Tangen told the Financial Times, adding that this difference in ambition is one of the primary reasons his fund has shifted its investments from Europe to the U.S. Under Tangen’s watch, Norges Bank has increased its U.S. holdings to nearly 47% of its portfolio, while Europe’s share has dropped to 29%—a reversal from two decades ago when European investments far outpaced American ones. The U.S. has also outperformed European markets in sectors like technology and artificial intelligence, where Tangen says American companies enjoy less regulatory red tape and a greater appetite for risk.
According to Tangen, one crucial difference is the tolerance for failure. “You go bust in America, you get another chance. In Europe, you’re dead,” he said, suggesting that Europe’s more conservative attitude toward risk limits its ability to compete with the U.S., where business failure is seen as a learning experience rather than a career-ending mistake.
Supporting Tangen’s observations, U.S. labor statistics show Americans tend to work slightly longer hours than Europeans. In 2022, the average American workweek clocked in at 38 hours, compared to 37.5 hours in Europe, with a significant number of U.S. workers regularly putting in 49-hour weeks. By contrast, Europeans work fewer hours, and countries like Germany and the Netherlands emphasize shorter workweeks and generous paid leave, which Tangen says could hinder competitiveness.
Though he admires the American work ethic, Tangen is critical of the high salaries common among U.S. CEOs, calling earnings above $20 million “daylight robbery” and noting that the value created should benefit broader stakeholders. Yet his fund continues to back U.S. businesses, especially technology companies, which make up a substantial portion of his portfolio. Tangen’s investments in companies like the “Magnificent Seven” tech giants underscore his belief that the biggest and most ambitious companies will continue to drive market growth, especially as the U.S. leads in AI.
As the 2024 U.S. presidential election looms, Tangen says political change won’t alter the fund’s heavy commitment to American markets. With almost half of the fund’s assets in the U.S., he sees no reason to pull back, confident that the American mindset of hard work and resilience will sustain its economic momentum.
Tangen’s stance is clear: the U.S. work culture he so admires is fueling the country’s business success. In his view, Europe could struggle to keep up without a shift in mindset.
[Source: Fortune.com]
