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Since the late 19th century Nydalen has been a largely industrial area. Beginning in the 1990s, it gradually transformed into a mix of "lighter" service industries and residential areas.
The relocation of the Norwegian School of Management (BI) to the area in 2004 also boosted the area's development. In 2003, a new subway station, Nydalen (station) opened in Nydalen. Many people have moved into new residential buildings in the late 2000s.
Nydalen is a shortened form for *Nygårdsdalen 'the dale/valley belonging to the farm Nygård'. The name of the old farm Nygård (Norse Nýgarðr) is a compound of nýr 'new' and garðr m 'farm'. The farm is first mentioned in 1578.
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