At the beginning of this new millennium, regional economies are confronting momentous changes. The globalisation of trade and economic activity is increasingly testing their ability to adapt and maintain their competitive edge. There is a tendency for income and performance gaps to widen between and within regions, and the cost of maintaining social cohesion is increasing. Rapid technological change and greater use of knowledge are offering new opportunities for local and regional development but demand further investment from enterprises, reorganisation of labour and production, more advanced skills and environmental improvements.
The OECD would like to thank the Swedish authorities at the national and subnational levels for their co-operation and support during the reviewing process. Special thanks go to Mr. Sverker Lindblad and Ms. Hanna Wiik, Ministry of Enterprise, Energy and Communications of Sweden, for the overall co-ordination of the project with the local team. The OECD is also grateful to the authorities of Västra Götaland and Norrbotten as well as Göteborg, Luleå and Kiruna for hosting on-site OECD study missions.
Assessment and recommendations
The combination of growth and equity objectives in Sweden has always had a strong territorial dimension. Based on an export-oriented, R&D-intensive industrial policy, Sweden has achieved one of the highest levels of GDP per capita and the strongest GDP growth rates over the past decade in the OECD area with a striking level of spatial concentration (51% of the national population and 57% of the national output are in the three regions of Stockholm, Västra Götaland, and Skåne in 2005).
Regional Development in Sweden
Sweden is a small open economy exporting a large share of its domestic production. The cold climate and particular geography creates an uneven distribution of the population with pockets of concentration, and surprisingly low levels of inter regional inequalities. Chapter 1 is comprised of three main sections. The first section identifies Sweden’s main macroeconomic strengths and challenges. The second section illustrates the high levels of economic and demographic concentration present in Sweden, their impact on national output and the low levels of inter regional inequalities. This section also evaluates the asymmetric impact of the global financial crisis on Swedish regions. The third section assesses the main factors of growth at the regional level and identifies opportunities for growth in the areas of promoting innovation, enlarging labour markets, improving inter regional linkages and examining future sources of growth in rural regions in renewable energies.
Exploiting Cross-sectoral Synergies through Regional Policy in Sweden
Reinforcing Sweden’s capacity to sustain growth and equity in the long term requires synergies among sectoral policies at the national an d reg i ona l scal e in order t o en han ce in n ovat i on a nd entrepreneurship in all regions. Building on the government’s renewed commitment to regional growth policy, recent initiatives have focused on promoting business development in all parts of the country including sparsely populated regions. Further efforts to facilitate the diffusion of knowledge and to improve the functioning of regional labour markets through more effective urban-rural linkages could help maximise regional growth potential. This chapter starts with an overview of recent regional policy in Sweden. It then discusses policy options to strengthen regional innovation systems, to fully exploit regional skills, and to explore regional opportunities for green growth. Finally, it considers ways to better link infrastructure investment with regional development priorities.
Reconsidering Multi-level Governance Arrangements for more Effective Regional Development
Whether Sweden can still achieve growth and equity objectives in the future will largely depend on its capacity to set in motion a virtuous circle based on synergies among sectoral policies at the regional scale. This calls for a collaborative process of policy design and implementation involving all levels of government. Sweden’s multi level governance system has sometimes been compared to an "hourglass", as it combines a highly decentralised system for the provision of welfare services with a relatively centralised system for strategic planning and regional development. In addition to external and structural constraints, institutional challenges can hamper the effective implementation of regional development policy objectives. This chapter is divided in two sections. The first section assesses the key strengths and challenges of Swedish governance arrangements for achieving its twin objectives of sustained territorial equity and enhanced regional growth. The second section seeks responses to challenges for bridging co ordination gaps across policies at the regional level, further empowering regional actors for regional growth policy and enhancing cost effective local public services.
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