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Regional growth 2013

- a report on conditions and trends in Sweden’s regions

Trade and industry, institutions and society at large are under the influence of an increasingly inte­grated global economy. Exports and exports of services­ in particular play a greater role for Sweden and its regions, as a clear indicator of the new global integration. Technological development, communication capabilities and the lowering of trade barriers also mean that different enterprises spread across different global locations are well-placed to join a worldwide network of production and value chains. This trend has placed high pressure on trade and industry and society to adapt accordingly. Meanwhile, there is also a great need to develop the economy in a more long-term and sustainable direction. The dynamism and agility of the economy can also be mobilised in guiding developments in the desired direction of greater economic, environmental and social sustainability.

However, to achieve the best possible results, it is necessary to take account of the different regions' traits and needs. The following summary consolidates a number of observations based on the as­pects of regional growth and development described and analysed in the report.

  • From an environmental and economic perspective, Sweden benefits from an abundance of natu­ral resources. Increased demand for minerals, energy, grain and foods has renewed interest in the basic industries. Its low population density gives Sweden advantages when high-sprawl enter­prises need to co-exist, but divergent interests and conflicting objectives have become increas­ingly common not just on the outskirts of expanding metropolises.
  • Geographical concentration is a key driver for growth and development in the Swedish regions. The three metropolitan functional regions account for just under half of the Swedish population and 55 per cent of the gross domestic product. Following decades of increasing population and income concentration, it seems unlikely that this trend could be halted or reversed in the future. The increase in population concentration is also the main trend characterising the country's functional regions.
  • Sweden is on the outskirts of Europe. This means that a functioning information and transport infrastructure is crucial for the country's development and growth. Many Swedish regions are reliant on factors such as flight connections to a wider world. In spite of a relatively high aver­age standard of IT infrastructure, major regional disparities exist in terms of the expansion of high-speed broadband.
  • Intraregional accessibility, expressed as proximity to services, also determines the attractive­ness of living and working in different parts of the country. Accessibility to shops has declined in 80 per cent of the functional regions.
  • Work commuting has increased in all types of regions in the 2000s, mostly in remote functional regions, although two-thirds of all inter-municipal commuters live in the metropolitan regions. This increase has not, however, resulted in sustained regional expansion in the sense that the number of local labour market regions has decreased.
  • The population trend in Sweden is regarded as being positive over the longer term. From a re­gional perspective, the prediction is for population growth in 40 of 72 functional regions up to year 2020. In many small functional regions, the declining trend is expected to continue. How­ever, this is not to say that some villages, towns and districts within a functional region will not tend in the opposite direction.
  • In 42 functional regions, migration has given the population trend a positive boost due largely to the large-scale immigration in the 2000s. Immigration undoubtedly boosts the population count in all the functional regions, but immigrants typically move on after a while to other, seemingly more attractive regions. However, European-born immigrants have a greater tendency to stay put in more peripheral immigration-dense regions.
  • Compared with other age groups, young adults show a greater tendency to migrate across the borders of the functional regions. Of those, young women tend to move more than young men, although the relocation frequency is decreasing for this group also. This is attributable partly to the fact that the youth cohorts have increased in recent years and partly to the persistent lack of housing in major cities as well as weaker labour market conditions. The double migration bal­ance – the shortage of young adults and women – also impacts on the birth rate in many of the smaller functional regions.
  • An ageing population is a problem for many functional regions in Sweden, as it is for many Euro­pean nations, although the situation for Sweden as a whole is less alarming according to Eu­rostat forecasts. While the proportion of young adults is relatively evenly distributed among dif­ferent types of region, the disparities are great as regards the proportion of mature adults of working age. The old age dependency ratio is highest in the most remote regions. According to a forecast, the problem of the ageing population is set to increase not least in many of the smaller functional regions in the interior of Northern Sweden. The ageing population is also placing greater pressure on public services and the demand for labour, which in turn exacerbates the shortage of labour in trade and industry.
  • In the short term, however, generational succession is cause for greater concern. In only 14 func­tional regions will the retiring workforce aged 55–64 years be replaced by a workforce in the age-range 20 to 29 years, and in the remaining functional regions there is thus a growing demo­graphic mismatch. Although generational succession embodies more complexities than these figures indicate, they are still indicative of the problems posed by the growing dependency ratio.
  • Sweden has a relatively high proportion of high educational achievers compared with other coun­tries. However, for this indicator, the metropolitan regions and functional regions with large towns are the highest performers. Demand for education is also not the same in all regions and a high proportion of high educational achievers is not necessarily a predictor of higher growth. For many regions, it is more significant to reduce the proportion of low educational achievers, as they are often those most adversely affected by change. This is the case particularly for young adults without upper secondary level education.
  • Women account for a large proportion of formal human capital growth in terms of post-second­ary education in functional regions, and this is also apparent in the transition to university edu­cation when surveying completion of upper secondary school. Small functional regions gener­ally show lower transition frequency, which suggests continued difficulty in recruiting young people from peripheral parts of the country to higher education.
  • A large proportion of the growth in gross regional product and employment stems from metropoli­tan regions, making these key drivers for national growth. However, growth is found in small functional regions also and not uncommonly at a higher rate than in urban regions. There are thus sound reasons for not focusing solely on the metropolises when developing growth poli­cies, but rather on promoting and enhancing interaction between the regions.
  • The state of flux within trade and industry is an indispensable and highly productive process. Jobs are created in new and expanding enterprises and shed from downscaled and discontinued enterprises, which thus results in increased growth and effective resource distribution. In this way, 440,000 new jobs were created within the year 2011, while 390,000 disappeared.
  • Recovery from the financial crisis in 2008/2009 has been rapid in the majority of functional re­gions. Every one of the functional regions has achieved growth in the rate of employment since 2009, but in 27 of the 72 functional regions, the number of employed persons is still lower than in 2007, that is, the year before the crisis. Only 28 functional regions showed any form of recov­ery in the number of manufacturing jobs. Only 7 functional regions display growth in the em­ployment rate within manufacturing as compared with before the crisis, which confirms the the­ory that it is generally difficult to reinstate the same types of manufacturing jobs once they have been lost.
  • The global integration of trade and industry is also seen in the number of employees in multina­tional companies. More than a quarter of all employed persons in Sweden work for such compa­nies. The differences between the functional regions are high. Metropolitan regions, certain manufacturing functional regions and functional regions with natural resources have a higher proportion than many small, often services-dominated, functional regions. Following a long downward trend, the share of employment attributable to multinational companies rose again, with this trend seen in all types of regions.
  • Labour productivity is an important indicator of competitiveness. The regional differences at county level may be small compared with other countries, but are more prominent at functional-region level. The metropolitan regions, and a large number of industry-intensive functional re­gions, have relatively high productivity levels. Many smaller functional regions, dominated more by the service industry, however, showed relatively low labour productivity. The metro­politan regions display weaker productivity growth than other types of regions.
  • Ambitions are high to reduce greenhouse gas emissions and to reduce energy consumption by raising the economy's resource efficiency. The aim is to achieve this not least by promoting green growth, green structural conversions and environmental innovations in the Swedish re­gions. Emissions of carbon dioxide equivalents constitute an important metric in this context, as this may be linked directly to economic activities in a country or region. However, emissions levels differ in different functional regions and are dependent on sectoral and settlement struc­tures. A reduction was achieved in 55 of 72 functional regions. A number of regions in the inte­rior, however, showed an increase in emissions measured per capita. The decrease in emissions overall was greatest in densely populated regions close to a city, which account for 58 per cent of the total decrease in Sweden. This is explained by trade and structural changes. At the same time, eco-efficiency, value-added per ton of carbon dioxide equivalent, has increased signifi­cantly in these types of regions.
  • The employment rate for persons aged 20–64 years increased in 57 functional regions between 2002 and 2011. This improvement may, however, be achieved in different ways. In only 18 functional regions did the number of employed increase more rapidly than the population in the same age-range. 16 regions showed employment growth and a fall in the population. An im­provement in the employment rate is also typically achieved if the population falls faster than the number of employed in the same age-group. Different types of changes may thus result in the same type of improvement.
  • The participation of older persons and young adults in the labour market has also changed over time. While, in a growing number of regions, increasing numbers of older persons remain in the workforce until pensionable age and beyond to a far greater extent, the trend is reversed for young people at the start of their working lives. The average age of labour market entry in 2011 was 29 years nationwide, which was one year older than in 2004.
  • Regional disparities in regional income per capita are relatively substantial. A certain levelling has, however, occurred between the functional regions in the period. On average, 8 per cent of incomes derive through work-commuting from other functional regions, but significantly more in certain parts of the country, not least when it comes to incomes from countries such as neighbouring Norway. How­ever, incomes from neighbouring countries do not provide any direct basis for an improved local and regional tax base.


Regional growth 2013 - a report on conditions and trends in Sweden’s regions

Serial number: Report 2013:06

Reference number: 2012/208

Download the report in Swedish Pdf, 6.2 MB.

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