Ronneby, 10 November 2011

The OECD Territorial Review of Småland-Blekinge: Main Trends and ChallengesWilliam TompsonRegional Development Policy DivisionDirectorate for Public Governance and Territorial DevelopmentOECD Ronneby, 10 November 2011

First, a word of thanks… • to the members of the local team (Emil Hesse, Helena Nilsson, Maria Nilsson, Per Schöldberg, Sofia Westerberg, Carin Karlsson and Lisa Wagnborg for an outstanding background report and the organisation of a flawless mission; • to the two dozen or so colleagues who helped them compile the report; • to all our interlocutors in the four counties during the March and June missions; • and, in particular, to Per Schöldberg, for acting as guide, chauffeur, advisor and chaperone during our missions. Ronneby Seminar

Part 1 A look at the recent past Ronneby Seminar

Relatively sparse settlement patterns Population density Even the most densely populated municipality in Kronoberg has a lower density of population than the sparsest TL3 regions in five OECD countries. Ronneby Seminar

Increasing concentration of population Demographic trends in the region mirror national trends on a smaller scale Ronneby Seminar

Sweden remains a high-productivity economy Productivity per hour worked in Sweden and OECD countries, 1970-2008 according to the figure 100=US productivity per hour worked Ronneby Seminar

The counties are not closing the productivity gap… GDP per worker in the four counties relative to the national average, 1995-2008 Ronneby Seminar

…But their performance compares well with that of OECD peers Småland-Blekinge counties exceeded the average rate of productivity growth for high-productivity rural regions by almost one full percentage point (0.85 pp) over 1995-2007 – equivalent to an 11% productivity “bonus” over the period. Only 30% of high-productivity rural regions in the OECD area recorded higher rates of productivity growth. Ronneby Seminar

Growth performance has likewise been unspectacular in a Swedish context… Ronneby Seminar

…but relatively strong compared to other OECD regions Ronneby Seminar

The counties suffer from exceptional volatility of growth Ronneby Seminar

Their business cycles reflect this Ronneby Seminar

The labour-market impact of the crisis was thus particularly severe Ronneby Seminar

Which is linked in part to their economic structure Specialisation index in mining, quarrying and manufacturing, 1995-2008 Ronneby Seminar

The counties are heavily specialised in goods production Structure of GDP by economic sector: the four counties and Sweden Ronneby Seminar

Specialisation in low- and medium-low tech industries Ronneby Seminar

Specialisation in high-tech and knowledge-intensive sectors Ronneby Seminar

Net outward commuting is modest but rising Outward commuting flows, 2009 Inward commuting flows, 2009 Ronneby Seminar

Functional labour markets are growing Local labour-market areas in Småland-Blekinge Ronneby Seminar

Gender differences are declining in employment… Employment rates Unemployment rates Ronneby Seminar

…and wages Ronneby Seminar

Firm start-ups by managerial gender Ronneby Seminar

Part 2 The challenge of the future Ronneby Seminar

Transition ahead • The recent crisis has forced the pace of structural change in OECD economies. • The implications of this shift are particularly great for the counties of Småland and Blekinge. • It is becoming increasingly difficult to sustain competitive medium-to-low tech manufacturing in the developed countries. Ronneby Seminar

A set of inter-linked challenges • Human capital: formation, retention and attraction • Innovation: making the most of the region’s knowledge-creation potential • Promoting new forms of entrepreneurship • Improving connectivity within the region and beyond: can Småland-Blekinge pursue agglomeration without density? • Creating forms of governance that enable to the counties to address the above in an integrated fashion Ronneby Seminar

Educational attainments are relatively low by comparison with national averages Ronneby Seminar

…But still rather high by OECD standards Ronneby Seminar

Retention of educated youth is difficult Percent of post-secondary graduates from a county residing in the same county, 2007 Ronneby Seminar

International migrants as % of population, 2010 Ronneby Seminar

Connecting the region Ronneby Seminar

Road connections to external markets could be improved Note: The indicator measures accessibility to potential markets in travel time by road using an inverse weighted GDP matrix to all EU regions. The weighting rule applies the inverse distance for travel time. Potential rail access thus measures all the people that can be reached from a given region to all other regions in the EU. Ronneby Seminar

Rail connectivity is better but not terrific Note: The indicator measures accessibility to potential markets in travel time by rail using an inverse weighted GDP matrix to all EU regions. The weighting rule applies the inverse distance for travel time. Potential rail access thus measures all the people that can be reached from a given region to all other regions in the EU. Ronneby Seminar

Improved connectivity within the region could also help labour-market performance Ronneby Seminar

Activity rates have tended to be high Employment and unemployment rates for Swedish counties, 2007 Ronneby Seminar

Youth unemployment and population density Ronneby Seminar

Connectivity should also favour entrepreneurship Ronneby Seminar

Enterprise creation Ronneby Seminar

Ronneby, 10 November 2011