The World Economic Forum

International Export – The Engine of Economic Growth in Sweden

Sweden has an economy that is wholly oriented towards export. In order to support the role of international trade within the economy, the Swedish government has prioritised developing an excellent transport infrastructure for efficient freight forwarding and international freight.

This has meant that over the last 15 years, Sweden has steadily grown its position as a net exporter of goods.

The main Swedish exports are timber, iron ore and hydropower, with the engineering sector making up half of all exports.

Other significant export sectors contributing to international freight are IT and telecommunications, cars and pharmaceuticals.

Many of Sweden’s companies involved in exports are world famous brand names. There can be few people who have not heard of Volvo, Sony Ericcson Mobile Communications or Electrolux.

Most of Sweden’s industry is in the hands of privately owned companies and it is their competitive approach that is driving Swedish economic success. Indeed, Sweden has been ranked as the 4th most competitive country in the world, according to the World Economic Forum 2008.

Another indicator of why Swedish exports are so successful worldwide is the high investment in research and development. Sweden’s investment in research and development stood at over 3.5% of Gross Domestic Product in 2007. This is higher than most countries, including the United States, and this focus on innovation is helping keep Swedish products at the forefront in their export markets.

The same drive towards innovation can also be seen within shipping companies and the freight transport industry in Sweden. For example, freight services in Sweden are leading the way worldwide in the use of It based intelligent transport systems. This use of innovation within the freight transport industry itself helps the export trade to stay competitive.

The largest trade flows from Sweden are with Germany, United States, UK and the other Scandinavian countries of Norway, Finland and Denmark. Export is growing significantly. For example, the value of exports to the United States have grown by 50% in the last four years, with a total value of 14 billion dollars. This is particularly impressive when you remember what a small country Sweden is, with a population of only 9 million.

So what has caused this extraordinary success story in export and international freight? One important factor has been that Sweden suffered a severe Recession in the early 1990’s and there was renewed focus by the Swedish government on supportng and building export markets at that time as lynchpin of the economic recovery plan for the country.

Since then, export has boomed, so that export is now the main driver of economic growth in Sweden. There has been a shift in the kind of exports, moving away from traditional industries such as steel,paper and pulp and towards knowledge based industries such as IT and telecommunications.

This has made the export sector more robust and less vulnerable to fluctuating global demand.

The freight transport infrastucture In Sweden has been upgraded and modernised to support the export economy. The freight transport infrastructure now includes fast rail links, expressways and a network of ports and harbours with state of the art terminals and container handling facilities, for example at Gaevle, Goteborg, Malmo, Sundsvall, Helsingborg, Halmstad, Kalmar and Stockholm. The emphasis on streamlining and efficiency can be seen throughout the freight services industry, from the largest shipping company right down to the smallest freight company.

So as the Global Economic Downturn casts its shadow over worldwide markets, there is no doubt that Sweden will be in a stronger position than most to weather the storm.

The investment in building competitive export markets, combined with investment in a leading edge infrastructure and a world class freight forwarding industry will help ensure that export continues to drive Sweden’s economy in the years ahead.

About the Author

Stephen Willis is Managing Director of
RW Freight Services
a UK based freight transport company, established in 1971 and operating worldwide freight forwarding services including specialist freight services to and from
Sweden

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