Trust, collaboration and strong clusters attract companies to the Gothenburg area

Gothenburg is one of the regions in Europe with the most concentrated R&D activities, attracting one third of all private R&D investments in Sweden. The advanced manufacturing industry and concerted efforts to build bridges between business, politics and academia, which we call the cluster model, are part of the explanation. However, even more important is the fact that Swedish business culture is centred on trust, collaboration and optimism.

The crisis that started it all

Between the two world wars and following the second world war, Sweden developed into one of the world’s leading shipbuilding nations, with Gothenburg dominating the heavy shipbuilding industry up until the mid-1970s. However, competition from low-cost countries such as Japan and, a few years later, South Korea, had already started to make itself felt in the late 1960s. State intervention in the shape of guarantees and ownership delayed the necessary structural changes, so it was not until 1985 that the shipbuilding industry hit rock bottom.

“That was the starting signal for an industrial transition in the region, with heavy basic industry being replaced by a more knowledge-intensive manufacturing industry, characterised by close collaboration between companies, academia and the public sector,” says Andreas Göthberg, Head of FDI at Business Region Göteborg’s Establishment and Investment Department.

Gothenburg becomes a Nordic R&D hub

The shipbuilding crisis and the subsequent need for an industrial transition were not the only reasons why the Gothenburg region became a Swedish and Nordic hub for research and development. As an old trading port, Gothenburg has a long tradition of solving problems through collaborations between different parties. This has helped to develop a business culture centred on trust, mutual responsibility and openness. The city and the region are also large enough to ensure the necessary weight behind different ventures while being small enough to keep the different parties close together. This makes the Gothenburg region particularly well suited to the cluster model introduced a couple of decades ago.

“We work on the basis of Harvard professor Michael Porter’s theories on clusters as a force for regional growth, with the central theme being the relationships between large and small enterprises, as well as between trade and industry, educational institutions and researchers, the public sector, financial stakeholders and the global market,” says Maria Strömberg, Director of Clusters and Innovation at Business Region Göteborg, and continues:

“Business Region Göteborg is involved in nurturing all these relationships.”

Sustainable trade and industry based on clusters and test beds

In 1997, Sahlgrenska Science Park was founded with the explicit purpose of helping Sweden to achieve a leading role in medical technology. Today, some 90 companies – many with admirable international reputations – are affiliated with the innovation environment of Sahlgrenska University Hospital through the aegis of Sahlgrenska Science Park.

Three years later, Lindholmen Science Park was founded, with a focus on IT and mobility for people and goods. Over the years, Lindholmen has evolved into Sweden’s leading science park, with 25,000 people living and working in the area alongside about 375 companies.

In 2006, Johanneberg Science Park was inaugurated, which has now evolved into Sweden’s foremost arena for the built environment with a partner network spanning more than 150 companies of different sizes. In addition to the three science parks, the Gothenburg region has around 60 test beds where different stakeholders can meet to develop new technical solutions.

“There are many examples of stakeholders that have chosen to establish themselves in the Gothenburg region to leverage the advantages of our strong clusters. This is especially evident if we consider Lindholmen and all the companies that have established operations there. What’s more, there’s a number of large projects, such as the transition to a fossil-free transport system, as well as several smaller pilot projects aiming to accumulate knowledge and pave the way for sustainable technology development,” says Maria Strömberg.

Tax incentives for innovators

To make Sweden an even more attractive country for investment, on 1 April 2020 a decision was made to reduce employer contributions for employees working in R&D. The new rules increase the R&D deduction from 10 to 20 percent per employee. Parallel to this, the limit for the deduction has been raised to SEK 919,000 per month, which is just over SEK 11 million per year.

This deduction enables companies to enhance their inhouse expertise to continue existing innovation efforts and to leverage the opportunities for change brought about by the coronavirus pandemic.

“Gothenburg is an important hub for Swedish R&D, and we have leading expertise in areas such as the automotive industry, life science, ICT, logistics and urban development. This new deduction provides an additional incentive for companies to expand their R&D activities in Sweden or to move them here. This benefits the region and our trade and industry, in terms of both managing the effects of Covid-19 and our long-term competitiveness,” concludes Andreas Göthberg, Head of FDI at Business Region Göteborg.

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