The development of Sweden’s bioeconomy
– Statistics and analysis
There is no clear definition of what is included in the “bioeconomy”. Moreover, a number of difficult assessments have to be made in order to calculate the size of the bioeconomy. This report is based on an initial assessment by Statistics Sweden and Growth Analysis and is based on Sweden’s national accounts. It is estimated that Sweden’s bioeconomy constitutes 7.1 per cent of Sweden’s total value added and 22.9 per cent of the total goods exports in 2014.
The predominant components of Sweden’s bioeconomy are forestry and the products that are made from forest raw materials. Approximately two thirds of the total value added within the bioeconomy in 2014 came from the value chain that starts with forestry. The largest single added value is produced within the food industry.
In 2014, almost 350,000 people were employed in the bioeconomy. Agriculture was the predominant industry but, just like forestry, agriculture is an industry with many part-time jobs. This means there is a relatively big difference between the number of jobs and the number of man-years in these industries.
The building of housing is expected to increase the value added of the bioeconomy
The building of houses and flats is one of the most important industries for the total value of the bioeconomy. It is expected that the increase in building that started in 2014 will soon be apparent in statistics. If the share of blocks of flats that are made out of wood increases, this development will be even more noticeable.
Exports under threat because of tougher competition facing pulp and paper mills
During the last decade, the demand for newsprint has gone down in the world by about a third. Sweden has not been particularly affected by this since our production has not focused on newsprint. However, competition is becoming increasingly tough as regards finer paper and cardboard. As a result, several countries, like Finland and Canada, that have been major paper producers are trying to develop new products based on forest raw materials for new markets. This is seen as being a necessary measure in order for the industry to retain its significance. Through interviews, it has emerged that Sweden is not keeping up with this trend.
Policy objectives for the bioeconomy can have different purposes, for instance, objectives that will lead to expansion on established markets or objectives that will lead to expansion on new markets. The latter type of objective will not be noticeable in the statistics presented in this report since completely different indicators are needed.
The choice of objective will determine what sort of measures will be the most effective. If the goal is to promote a rapid development of the bioeconomy, policy instruments should be directed at increasing the building of wooden houses. However, a more long-term development of the bioeconomy will need new products developed for new markets where products from the current bioeconomy either do not exist or cannot compete. This sort of development is easier to discern in countries like Canada and Japan. In both of these countries, there is close collaboration between trade and industry and the government to develop new materials based on forest raw materials.
Growth Analysis suggests that:
The government’s role in the development of the bioeconomy should be:
- To carry out a structured analysis of the challenges facing Sweden’s bioeconomy and to identify what types of instruments are needed to handle them.
- To make it clear that the bioeconomy is being prioritised and thereby reduce the market risk.
- To stimulate exchanges and collaboration among companies, universities, research institutes and other stakeholders within the bioeconomic and other related fields where new markets can be created. This is a measure that has been taken in Canada and Finland and which has created prerequisites for other initiatives.
- To evaluate and develop policy instruments and introduce new policy instruments if necessary. One important policy instrument for creating new markets for bioeconomic products is green procurement.
Bioeconomy objectives and monitoring
- Statistics Sweden and Growth Analysis should be commissioned to produce statistics with, for example, an input-output analysis. An input-output analysis makes it possible to monitor the bioeconomy’s production of value added further up the value chain and to analyse the effect of the bioeconomy on greenhouse gas emissions. Statistic Sweden’s role is to produce statistics while Growth Analysis’ role is to analyse the statistics and also analyse how the value chain linked to forestry can be strengthened.
- Develop indicators for new markets. It will not be possible to monitor an expansion of the bioeconomy on new markets with official statistics. Growth Analysis should therefore be commissioned to produce indicators and tools, together with Statistics Sweden, so as to be able to monitor developments on new markets.