Sweden’s economic centre is moving westward
The Gothenburg region has grown stronger than other regions since the peak of the financial crisis and has developed into Sweden’s centre for knowledge-intensive industries, shows a new report from two prominent Swedish professors.
“Gothenburg's continued development is important for all of Sweden,” says Martin Andersson, professor of industrial economics and one of the authors of the new report, Göteborg borgar för tillväxt (Gothenburg ensures growth).
Urbanisation has long been strong in Sweden. Over the past ten years, employment has increased by 25% in the regions around Stockholm, Gothenburg and Malmö. In the rest of Sweden, jobs have increased by just under 15%.
The reason is that Sweden competes in industries whose companies are looking to larger cities and regional centers and need to do so to get the right type of qualified personnel.
Gothenburg has developed a specialty
But Gothenburg has attained a unique position as Sweden's centre for natural sciences and technology, a position that has been particularly favourable.
Since 2010, the number of employed people with a longer tertiary education has increased faster in Gothenburg than in all other regions. The proportion of people who have studied natural sciences and engineering (34%) is today significantly higher than in the Stockholm and Malmö regions (29% and 28% respectively).
“This has probably contributed to the Gothenburg region's attractiveness for large parts of the knowledge-intensive business sector,” says Martin Andersson, referring to trend areas such as green technology, digitalisation, energy-efficient production, fossil-free transport, software-based systems and the use of AI.
The authors write in the report:
Employment growth in knowledge-intensive business services has been the strongest in the country and the region is unique compared to other metropolitan regions and the rest of Sweden in that the region has a simultaneous expansion of the manufacturing industry and knowledge-intensive business services.
In particular, employment of highly educated workers and those with a longer education in engineering and natural sciences has grown the strongest.
The growth also has an impact on gross regional product, GRP, and especially GRP per gainfully employed person. Since 2015, business investments in intramural research and development (R&D) have also grown significantly, and the Gothenburg region is today Sweden's main R&D region with investments in intramural R&D amounting to almost SEK 60 billion.
Why has this happened?
The report summarises some important explanations for Gothenburg's strong development:
- Rapid growth of jobs in central Gothenburg
- Larger labour market - more commuters
- Replenishment of expertise from universities
- A group of global "anchor companies" like Volvo Cars, Volvo and AstraZeneca who drive development
- Symbiosis between knowledge-intensive services and manufacturing
- Self-reinforcing increase in research and development
- Growing career opportunities in knowledge-intensive professions
- Lindholmen Science Park - a successful initiative
As Gothenburg's importance for the Swedish economy and competitiveness grows, the city is becoming increasingly important for all Swedes, according to Martin Andersson. Stable access to electricity in the west is particularly important, given the large industries operating here. But this also applies to infrastructure in general.
“The rail connection to Borås will prove to be very valuable for the entire country, as the improved commuting opportunities will cause the entire labour market to grow geographically, which in itself drives the economy. Improved connections within the region, and new growth nodes such as GoCo Health Innovation City and Näst in Torslanda, will also benefit the quality of life in the entire region,” says Martin Andersson.
What risks do you see ahead for Gothenburg?
“The global trend towards protectionism poses a risk that could seriously hamper the growth of both Gothenburg and Sweden. It is particularly important that regions such as Gothenburg can maintain good access to qualified labour, R&D and cutting-edge technology to compensate for any deterioration in terms of trade,” says Martin Andersson.
The report provides policy recommendations to maintain the strong development that Gothenburg has experienced over the past decade or so. It is available in Swedish on our corporate site.
The report is authored by:
Martin Andersson, professor in industrial economics at Blekinge University of Technology
Jonas Månsson, professor in industrial economics at Blekinge University of Technology
Link to report (in Swedish): Göteborg borgar för tillväxt