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, re-organisation of labour and production, more advanced skills, and environmental improvements.

Skåne occupies a strategic location at the gateway to northern Europe and has made a solid contribution to Swedish growth. In the years prior to the crisis (2000-2007), Skåne contributed 12% of aggregate Swedish GDP growth, behind Stockholm and Västra Götaland. Immediately prior to the crisis, as growth in the rest of Sweden began to decline, economic growth in Skåne accelerated, rising from just under 4.5% in 2005-2006 to over 7.1% in 2006-2007, though this promising trend was reversed when Swedish growth began to fall in 2008. Skåne was particularly hard hit by the downturn, but made a relatively quick recovery in 2009.

Substantial population inflows have meant that, in terms of per capita growth and employment creation, the region of Skåne has had to run to stand still. Nevertheless, a strong innovation sector, a relatively young labour force and high stocks of human capital ensure that the region is well placed to capitalise on these inputs over the coming years. This chapter presents an overview of recent demographic, economic, and social trends in the region, setting them in both a Swedish and an international context. It attempts to get behind the drivers of these trends, with a closer look into productivity and human capital as well as innovation and entrepreneurialism in the region. This chapter presents evidence of a series of policy challenges for the region – challenges relating to innovation, social cohesion and the environment – to which key recommendations are outlined in subsequent chapters.

Skåne is a top research and technology hub. But globalisation of value chains, deficient entrepreneurship and weak SME innovation explain why these strong assets are not sufficient to significantly contribute to growth and full employment in the region. This chapter investigates the strengths and weaknesses of Skåne’s innovation strategy. Recent policy developments are found to be well in line with the new paradigm for innovation policy but the chapter argues that, in addition, there is the need to pursue a double track regional innovation policy: supporting the role of higher education in innovation while at the same time enlarging the innovation base. The chapter continues with a look at four areas for improvement necessary for the efficient implementation of the recently adopted “smart specialization” strategy: outcome-driven policy, effective cluster policies, reinforcing international dimensions of innovation and putting business at the centre of the strategy. In this manner, the chapter concludes, Skåne can move from a top “science and technology hub” towards a wealthy and inclusive “innovative region”.

Skåne has long been one of the three major engines of national growth but it has been underperforming both the other metropolitan regions since the late 1990s. While the population it has attracted both from abroad and elsewhere in Sweden has tended to concentrate in a few large municipalities, this demographic dynamism has not translated into corresponding gains in terms of productivity and skills. This calls for a particular focus on building a more efficient and cohesive labour market. This chapter begins with an overview of the labour market context – the national policy context, and the regional context – within which regional policy operates. The chapter then continues with a deeper focus on the labour market experiences of the categories of workers particularly vulnerable and underexploited in Skåne’s labour market: immigrants, youth, the low-skilled. Finally the chapter concludes with a look into potential policy directions for the region.

Maximising Skåne’s growth potential requires integrated policies to build a high-quality living environment. Skåne’s current population of 1.2 million is forecast to rise to more than 1.3 million by 2020. This increase – over 12 000 people per year – will put additional pressure on public services and regional resources. Upcoming investments, including the opening of high level research facilities and new transport corridors, have the potential to draw additional inflows of people who, if fully productively integrated into the regional economy, could generate considerable spill-over effects. Such growth, however, will not come automatically. Preparations for the next regional development programme open a unique window of opportunity for Skåne; an opportunity to cultivate a holistic vision, to ensure that potential complementarities are exhausted and investments are mutually reinforcing. Creating an attractive environment to achieve its aim of becoming a vibrant and innovative regional hub, Skåne must build on its existing strengths: enhancing accessibility; protecting the environment; and promoting attractiveness through improved housing, spatial planning and branding.