Gothenburg's new flagship: knowledge-intensive services
Gothenburg is renowned for its strong industrial sector. But the business services sector has increased powerfully and now employs twice as many people as the once dominant manufacturing sector, shows a new report from Business Region Göteborg.
The sub-sector knowledge-intensive services has become Gothenburg's new flagship. One in six employees in the region now work for technology consulting firms or companies in IT or other advanced business services. In total, the subsector employs just over 95,000 people. This part of the services sector has almost doubled in size over the past 15 years.
At the same time, the manufacturing sector in the Gothenburg region remains strong and this has contributed to the region's economy growing faster than in other metropolitan regions and the country as a whole over the same period. But the structure of the economy has changed. The proportion of services has increased.
“We have had, and have, a strong symbiosis between our successful global industrial companies and a fast-growing advanced services sector. This has strengthened the competitiveness of the entire business community here in the region,” says Peter Warda, senior analyst at Business Region Göteborg, and author of the report Sysselsättning i fokus (Employment in focus).
Sector share of the total employment in the Gothenburg region:
- Knowledge-intensive services - 16.3%
- Commerce – 12.2%
- Manufacturing – 10.7%
- Construction – 6.7%
Sweden's dominant region for research and development
The knowledge content of goods and services from Gothenburg is generally very high. The region's service companies have grown and serve customers in an increasing number of industries, both domestically and internationally. The development is expressed in several ways in the statistics:
- Engineers and IT architects/system developers/test managers have been the two most common professions in the City of Gothenburg for a while and have now also sailed to the top in the Gothenburg region. Store clerks in the commerce sector have fallen to third place.
- The proportion of natural scientists and engineers is 50% higher in the Gothenburg region than in other Swedish metropolitan regions, and twice as high as in Sweden as a whole.
A main explanation is that Gothenburg has established itself as Sweden's centre for scientific and technical work. This was confirmed in a report by two prominent Swedish professors published in the spring.
With Gothenburg as the driving force, companies in Västra Götaland invest more in research and development than anywhere else in Sweden and account for 35% of the total private R&D expenditure. A full SEK 10 billion more annually than the companies in the Stockholm County.
More areas of strength than other regions
When we look at how Swedish employees are distributed across different industries, we can see that Gothenburg’s areas of specialisation are becoming broader. Spearheaded by Volvo Cars, the region has a very strong presence in the nation’s passenger vehicle industry. Gothenburg also has a high concentration of employees in other major industries including bearings and gears, shipping, plastics, microwaves and satellites, and even amusement parks.
By contrast, the Malmö region shows a higher concentration of employment in the sugar industry, fermented beverages and food, as well as related machinery and packaging. Meanwhile, Stockholm has a stronger focus on banking and finance, fund management, insurance, government agencies, and international organisations.
“The transformation we have seen in our business sector makes the Gothenburg region less sensitive to economic cycles. Knowledge-intensive services are more flexible: they can be used in several areas of strength and follow needs,” says Peter Warda.