Assessment and recommendations
The context of the review
In 2011, the OECD conducted a Territorial Review of Småland-Blekinge, Sweden, which was approved in the 13th session of the OECD Regional Development Policy Committee and was published in 2012. The report provided 12 recommendations and 32 sub-recommendations to the region and its 4 counties (OECD, 2012). The review highlighted the need to shift towards higher value-added and knowledge-intensive industries and businesses; stronger links between the regional education system and the private sector; more support for entrepreneurship and enhanced attractiveness to residents, migrants and tourists.
To follow-up on the recommendations, the OECD conducted the present Review of Småland-Blekinge. The objectives of the review are to: i) assess the main regional policy changes since 2012 and the extent to which the recommendations from the territorial review have been implemented; and ii) examine the processes of recent migrant settlement and integration in Småland-Blekinge and offer recommendations.
New realities in Småland-Blekinge
Improving economic performance, administrative mergers and increased migration have changed conditions
Småland-Blekinge is evolving under a different scenario than the one in 2012 when the OECD conducted the territorial review of the region. There are several differences to note: i) the arrival of a large number of humanitarian migrants; ii) a different macroeconomic context after the effects of the global financial crisis; and iii) ongoing waves of administrative mergers at county-level.
The four counties of Småland-Blekinge were negatively impacted by the 2007 financial crisis. However, the economy has rebounded over the past five years and the counties are now recording positive economic and employment growth. Since then, the four counties of Småland-Blekinge have experienced a climate of economic recovery and have been expanding their economic base. These conditions have affected how the counties work together with municipalities and the private and third sectors in order to address common challenges such as growing labour market demand and housing shortage.
A second change is administrative mergers at county-level in Jönköping and Kronoberg wherein competencies for regional development have been incorporated into the county council structure. Blekinge and Kalmar will adopt a similar structure in 2019. The current project of mergers has brought together two administrative institutions that, despite sharing common responsibilities, differ in purpose and organisational culture.
Finally, over the past five years, Småland-Blekinge has seen an unprecedented population increase, fuelled by a rise in migration, mostly from asylum seekers and refugees. The four counties recorded among the highest net migration rates per capita in Sweden during this period. The pace at which newcomers have arrived in Småland-Blekinge has challenged the region to provide suitable housing and to reorient services and develop new ones to meet the needs of this diverse group. Migrant integration and retention in the region will be critical for its future development. This monitoring review dedicates a special focus chapter on migration.
Current trends
The region is facing the following trends:
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Population growth is primarily due to the arrival of immigrants. In the period 2011-17, the increase amounted to 0.89% annually.
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The performance in gross domestic product (GDP) per capita amongst the counties has been mixed. Kronoberg has been catching up on the national average, Jönköping has been growing around the same pace as the national average and both Blekinge and Kalmar have been declining. At the international level, the growth rates in GDP per capita of the 4 counties have been above the average growth rate of 40 comparable regions.
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Productivity in the four counties is below the average of comparable regions. This is a key area of priority for improving competitiveness.
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In terms of innovation, research and development expenditures are high in Kronoberg and for patent intensity, all counties fare well with respect to comparable regions.
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Unemployment rates have however been decreasing over the past years. As of 2016, Jönköping and Kalmar lie below the national average.
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The share of low-skilled workers in the labour force remains higher than the national average.
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All counties face increasing housing prices. According to 2015 data, in Jönköping and Kronoberg property prices are above the national average, while in Kalmar and particularly Blekinge they are below.
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Digital connectivity and internal accessibility have progressed significantly. However, mixed results are observable for external connectivity.
Measuring progress over the past five years
Overall progress
The 2012 Review had identified 12 recommendations to support regional development.
Amongst the 12 recommendations and 32 sub-recommendations identified in the 2012 review, Småland-Blekinge has made notable progress in 8 of the sub-recommendations (28% out of total) and have met 4 of them (around 14% out of total). Mixed results appear in 41% and no progress of very little progress in the remaining 17%.
Most notably, progress has been made in developing a more efficient support framework for the private sector, particularly in traditional industries, and expanding beyond business creation to also support existing SMEs. The region has demonstrated notable progress in intra-regional co-ordination in a number of key areas, including in infrastructure. Although accessibility to the region remains a concern, co-ordination among counties has strengthened, attaining a common identification of needs and increased bargaining power when negotiating with the national administration.
The arrival of migrants has represented a challenge and an opportunity for the region, leading to the development of a support scheme for integration (Chapter 3). However, the focus on migrant settlement and integration should not shift away from support for female and youth entrepreneurship. Improving capacities at the municipal level remains a concern, as well as better matching skills with available jobs, in particular, vocational training and increasing the attractiveness of local job markets to young graduates. Finally, tourism branding has increased but the focus on quality of life and regional attractiveness could be strengthened for local residents.
Given this relatively short period, this progress demonstrates an active agenda by public officials in implementing the recommendations identified in 2012.
Assessing the implementation of recommendations
This review measures progress in each of the sub-recommendations, according to 4 scales: 0, if no significant progress was made; 1, for when further implementation is needed or results in counties are mixed; 2, referring to notable progress; and 3, for when the recommendation was met by all counties. When notable progress is reached, the counties still have to deploy continued efforts and, even when the recommendation was fully implemented, ongoing actions are necessary to maintain the current situation. Three sub-recommendations concerning regionalisation are no longer applicable since the reform was abandoned in 2017. For this reason, progress is not evaluated for them.
Co-ordination between governmental institutions and regional actors has significantly progressed – this is central to meeting all other recommendations
As noted, significant advancement could be observed in 12 of the sub-recommendations:
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Promisingly, the majority of them relate to improved co-ordination mechanisms among key stakeholders in Småland-Blekinge, with a more cohesive identity and definition of common priorities.
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Support for business development, migrant integration and tourism are the areas where integration has improved the most, reaching positive outcomes.
In the remaining 58%, progress has been mixed, whereby further implementation efforts are needed:
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In 12 sub-recommendations, there has been little progress, or mixed results (41% out of total). The region needs to better connect skills and education with labour market demand. Transportation connectivity remains a major challenge but, promisingly, the four counties have developed a cohesive strategy and common voice, including neighbouring counties.
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In 5 sub-recommendations, no progress has been made (17% out of total). This lack of progress partially reflects changing priorities. For example, youth engagement has been slow to materialise. Air and freight transportation remain challenging aspects.
Note: Calculation based on 29 sub-recommendations, as 3 are no longer applicable.
When grouped by area, two of them show notable progress (knowledge-intensive economy and business development and quality of life and tourism), and in terms of municipal co-operation and reform, the average scale is three. The five other groups of recommendations show mixed results – even though some sub-recommendations had notable progress, for others there has been very little, arriving at the average of one.
Note: 12 recommendations grouped into 8 main themes.
Concerning the timeframe of each sub-recommendation, 31% are to be implemented in the short run (0 to 1 year), 48% over the medium to long term (1 to 5 years) and 21% over the long-term perspective (more than 5 years).
In particular, it is found that:
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Among the nine recommendations to be implemented in the short term, Småland-Blekinge has made notable progress in five of them and very little progress in four.
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Among the 14 recommendations over the medium term, the region has met 2 of them and made notable progress in 3, whereas for the remaining ones there has been no progress or mixed results.
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Among the six recommendations over the long term, two of them have been met, and in four there have been mixed results.
The sections below provide a thematic account of progress. The recommendations 1, 5 and 7 were grouped together, for addressing similar topics of business development, support to SMEs and knowledge-intensive economy. The recommendations concerning tourism and quality of life show complementarity, as better quality of life for residents, translates into attractiveness for migrants and tourists. The sub-recommendation on regionalisation which remains pertinent was integrated into the discussion of regional development programming.
Knowledge-intensive economy, SMEs and business development
Business development and tourism branding: where the dynamics of improved collaboration are most visible
Overall, there has been strong progress in this area. The four counties have provided more assistance in improving efficiency in traditional industries, as the example of dairy processing in Jönköping County shows. The local innovation ecosystem in Småland-Blekinge has become increasingly organised: new science parks and business incubators have been inaugurated, and complementary institutional structures such as Kalmar's Innovation Council have emerged. Smart specialisation strategies can flourish with the relocation of the eHealth national agency in Kalmar and the development of the bioeconomy sector in Jönköping. There is stronger intra-regional collaboration through the Tillväxtforum in Blekinge. Cross-border co-operation has seen advances, for instance with the office of Kronoberg County, Kalmar County and Linnaeus University in Shanghai, China. The office supports SMEs in the early stages of business in China and helps recruit East/Southeast Asian students to the university.
The business retention strategy should focus more on existing businesses
The focus of the counties’ entrepreneurial support and assistance has widened beyond business creation in order to include the existing SMEs. Counties need to place greater emphasis on business retention efforts, such that existing firms do not have to move elsewhere in order to increase their scale and competitiveness. Similarly, business succession remains an increasingly important subject for the region’s ageing population of SME owners and entrepreneurs. Business succession programmes including education, planning, legal assistance, transmission process assistance and seller/buyer match-making are still needed. Taking over an existing enterprise should be promoted as a valid “easy-entry” option for youths initiating their entrepreneurial career.
Another area for further amelioration is knowledge transfer. Higher Education Institutions (HEIs) experience difficulties in liaising with local businesses and technology upgrading in these businesses has been lagging behind as a result. One way to address this issue is to include HEIs-business collaboration as a requirement for project funding. Greater promotion and prioritisation of the creation and development of local knowledge-intensive business services (KIBS) is required, as they are important transmitters of knowledge and innovation across local firms and manufacturers. Lastly, the region should also promote the integration of postgraduate and PhD students in local firms.
Labour market mismatches
Poor labour market skills matching continues to be a drag on the region’s economy
Better linking skilled human capital with available jobs in the region is a multi-faceted challenge, where mixed progress has been made between 2012 and 2017. On the aspect of matching skills supply with skills demand, HEIs have liaised with the business community to develop new training programmes and curriculum updates, but vocational training still needs to be strengthened.
No programmes have been implemented with the objective of increasing the attractiveness of the local job market for young graduates, who continue to leave the region after their studies. HEIs and local industry should collaborate to seize the interest of the many European foreign students studying in Småland-Blekinge. Career guidance has been identified as another area for improvement. There is also room for greater labour-force “need finding” amongst local firms to improve labour market forecasting and guide the development of new programmes.
Supporting youth and female entrepreneurship are areas in which progress has been slow. Local universities should continuously invest in initiatives that focus on youth entrepreneurship in schools such as Ung Företagsamhet. To better promote entrepreneurship as a career for women successful local female entrepreneurs should be championed and promoted as role models opening the way for others to follow.
Furthermore, local programmes should fill the gap of national and EU funding by supporting the consumer-based services often promoted by women entrepreneurs, especially migrant women. Concerning migrant local employment opportunities, the region has to offer flexible training and educational pathways, including for instance specific language and computer skills development. The region could build a database of newcomers’ competency, which would be accessible to employers in general. Finally, the benefits and longer-term positive impact for the region of the increased immigration have to be highlighted by the government.
Quality of life and tourism
Tourism branding among the three counties in Småland has increased but the focus on quality of life and regional attractiveness could be strengthened for local residents
The recommendation addresses the need to increase the attractiveness of the region for old and new residents as well as tourists. Strategies to promote the natural and cultural assets for tourists have been developed. Tourism branding has strengthened, with the creation of a common brand and digital platform for the Småland region (visitsmaland.se) and a separate brand and digital platform (visitblekinge.se) for Blekinge. Now the co-operation has to move beyond branding to include development issues and combined offers. The outreach of such brand promotion could be significantly helped through collaboration with internationally renowned local consumer corporations. Tourism could be an important pillar of the region’s regional development strategy, especially if aligned with other policy areas.
Less progress could be observed in what regards attracting new residents to Småland-Blekinge. One notable exception is the inter-municipal co-operation in Kalmar county, called Kalmarsundsregionen, to brand the region as a great place to live and work. Cultural events and the presence of international schools could be better used in the future to scale up the region’s profile. Moreover, enhanced communication with local residents could contribute to generating local pride and a greater sense of belonging. This is a first essential step for retaining and recuperating local residents.
Accessibility
Transport infrastructure continues to be an obstacle rather than a catalyst to the development of the region
Accessibility projects require long-term investment to plan and implement. Although five years is a short period to observe concrete results, some progress was identified. The strengthened co-ordination among counties resulted in the identification of common needs and increased bargaining power when negotiating with the national administration. The proposed High-Speed Railway project will benefit Jönköping and Kronoberg counties. The project for eastern-oriented development and inter-county connections between Blekinge and Kalmar should not be abandoned, with the promotion of the development of eastern oriented commercial routes and infrastructure maintained. The focus on freight transportation has dissolved in most counties, except for Blekinge where it has doubled since 2012. A land to sea logistic platform ought to be considered in a long-term perspective. In the field of air transportation, subsists the competition among countries to establish connections with European hubs, with some countries experiencing positive fluctuation of traffic flows and others seeing traffic decline. The daily connection between Frankfurt and Jönköping, operative since 2016, has increased the county’s international connectivity. Besides international connections, counties should use airport infrastructure to address the needs of local businesses and industries.
The connectivity between nodes and less populated areas has been fostered by investments in public transportation, including sustainable commuting modes and research and development in the area. The challenge for the region in this matter is to adopt a functional approach, superseding administrative barriers. An integrated territorial perspective is needed to assess transport needs alongside other sectoral policy areas such as infrastructure investments and the delivery of public services.
Regional development
The existing framework for regional planning is evolving to take on a stronger form
While the regionalisation reform is no longer in the public agenda, inter-county collaborations remained strong in the areas of infrastructural planning and negotiation with the national administration. The need to enhance the regional planning system remains evident. The four counties are slowly building a spatial development vision for the region, in alignment with Sweden’s National Strategy for Sustainable Regional Growth and Attractiveness 2015-20. The complex knitting of roles and competencies of the many players involved in regional development is being simplified through the mergers of different institutions. Communication of the new roles and responsibilities to the general public and across the administration could facilitate interaction and promote institutional efficiency.
Further vertical and horizontal co-ordination could be achieved. Better linking regional programmes, plans and strategies together, including the rural development programmes, is necessary. Local action groups should be included within these co-ordination efforts and be better linked with the regional and county councils. The aim should be the elaboration of a single cohesive regional development strategy.
Jönköping is compiling municipal plans in order to develop a comprehensive understanding of spatial planning in the county. In Kronoberg, a network has been established with the aim of strengthening border-municipal planning. Reforms announce growing competencies for regional planning, which will be a unique opportunity to adopt a strong spatial vision for development that can help to target strategic investments, manage growth, enhance inter-municipal co-ordination and build local planning capacity.
Inter-county planning
Inter-county collaboration has taken on new forms
Inter-county planning has greatly improved since 2012, in all issues related to business and territorial development. Substantive progress has been achieved by: multi-stakeholder platforms in Blekinge, e.g. the collaborative platform of Blekinge Council; the creation of an Innovation Council in Kalmar; networking and consultation in Kronoberg; and the signing of a cross-county agreement on infrastructure priorities for southern Sweden. This progress has been achieved through soft instruments, based in interpersonal relations and in line with the Swedish culture of consensus-building. While these mechanisms have shown positive results so far, if personal relations change, co-operation may deteriorate. For this reason, it is important that counties invest in formal mechanisms to keep incentives in place and institutionalise the existing networks.
Future inter-county collaboration amongst the studied counties could involve data collecting and sharing for improved community planning; the pursuit of regional and inter-municipal co-ordination across functional territories; as well as the establishment of a vertical co-ordination forum between the regional and local levels on planning issues.
Public-private partnerships
More could be done to support the development of public-private partnerships – regionally and nationally
Public-private partnerships (PPP) have had some developments, notably in Blekinge and Kronoberg. There has been stronger collaboration between HEIs, local science parks and incubators, as well as more involvement of the Swedish business support agency, Almi, in public initiatives in the four counties. Because of the potential benefits of such collaboration, prioritisation should be given to the development of PPP investment projects at the senior political level. It remains necessary to encourage greater involvement of the private sector, especially in large infrastructure projects.
A legal framework for PPPs should be developed, with clear, transparent and enforced regulation. To do so, the counties will not only need to collaborate amongst themselves but also at a wider national level.
Municipal co-operation and reform
Increasing capacity at the municipal level remains an essential concern across the four counties of Småland-Blekinge
Inter-municipal co-operation has significantly improved since 2012, partly because the falling apart of the regionalisation reform and the challenges associated with migrant integration. The areas of infrastructure, housing and business development concentrate the majority of efforts. For instance, Business Gnosjö Region is a joint effort of four municipalities to promote the industrial district and businesses in the area. Capacity at the municipal level remains, however, a concern. The OECD had recommended an in-depth assessment of municipal competencies, which is being conducted by the national authority. The results of this investigation may allow counties to identify opportunities to adopt and develop a more asymmetric responsibility approach among collaborating municipalities of different sizes. This would reduce the existing dependency on third-party consulting.
Special focus on migration issues
The recent wave of migration offers an opportunity to rebalance demography in the region
The four counties of Småland-Blekinge experienced an unprecedented population increase (4.3%) between 2011 and 2017, which was fuelled by a rise in migration, mostly from asylum seekers and refugees. With a younger age profile than the native population, they help to balance the counties’ ageing demographic structure. Migrants also have the potential to contribute to employment, as the counties are experiencing labour market shortages in some occupations. Yet, the participation of migrants in the labour market is low: as of 2016, the employment rate was at 65.5% versus 80.5% for those born in Sweden (ages 15-74); meanwhile, the unemployment rate is 15.8% for foreign-born versus 4.8% for those born in Sweden. The main challenges associated with migration are labour market mismatch and co-ordination across levels of government to provide an effective, multi-sectoral policy response for migrant integration.
The participation of migrants in the labour market is lower than native-born but there are encouraging results for newcomers after the introduction programme
There is often a skills mismatch between newcomers and the types of jobs available. Demand is tilted towards high skills and qualifications in Sweden, but migrants do not necessarily have the required language skills, education or training. For example, there are unfilled jobs in the forestry, dairy and high-tech industries. Significant efforts have been made to address this mismatch. Flexible educational pathways have been adopted, which help individuals to meet programme requirements in a timely manner and make it easier for them to work, for instance in trainee jobs and vocational introduction jobs. Fast-tracking the recognition of foreign credentials and certificates has been of great help, but partial recognition needs to be better linked to complementary courses. There is a need to strengthen and expand initiatives of early skills assessments, which can enable a better profiling of asylum seekers and improve labour market matching. A related initiative is building a database of newcomers’ competencies and qualifications, to be made available to employers.
Migrant settlement and integration policies could be enhanced through improved vertical co-ordination and implementation at the relevant scale
The rapid influx of newcomers has challenged the counties to provide suitable housing and to reorient services and develop new ones. There are many different groups at the local level that offer programmes and services to migrants, and the main governmental actors know one another and are increasingly working together. Yet, this broader community could be better linked. Institutional mapping, inter-institutional fora and multi-stakeholder dialogues could help to achieve this. Examples in this direction exist. County administrative boards have recently been assigned to map the civil society’s efforts for asylum seekers. The four counties have regional councils for integration which act as a platform to discuss key issues for migrant integration. Inter-municipal partnerships can be established to set up joint service provision and financial agreements. For instance, the Association of the Region of Gothenburg has set up an organisation called Validation Test, for skills certification. Ronneby Municipality has an integration and education centre which operates societal orientation for all immigrants in Blekinge County.
Concerning the provision of services, the counties could reinforce the entry points, invest in co-funding and facilitate co-ordination. One-stop shops could help individuals to better navigate the services available to them. Regrouping relevant information in one place renders the integration process more transparent and expedite. Creating standalone municipal or regional departments or co-ordination bodies would help to mainstream integration policy across municipal departments. Such bodies can raise awareness and build capacity in other departments and develop “migration-sensitive” policies in their respective sectors of competency. Some municipalities such as Ronneby in Blekinge County have adopted a migrant integration strategy. In order to be operational, such action-oriented strategies require a budget and dedicated personnel. The capacity to share information among service providers also has to improve, following the example of the Meeting Venues Project that occurred in 2015.
The successful labour market integration of migrants has been one of the most important issues for Småland-Blekinge. At the national, regional and local levels, a great deal of progress has been made in adapting systems to better support the most recent wave of migrants. However, there remain several areas for further progress. Namely, while there is progress in the fast-tracking the recognition of foreign credentials, these have to be better linked to bridging courses. Furthermore, while working with key sectors to meet labour market demand has proven successful, firm uptake has been slow. More firms need to be convinced of the merits to engage in this manner. Finally, more needs to be known about which initiatives for migrant entrepreneurship are working best and how they could be improved.
In all, inclusion and equal access to opportunities is a major aim of migrant integration in Sweden. While many important initiatives have been deployed to assist individuals to access education, training and jobs and start businesses, achieving these goals requires different levels of government to work together – local, regional and national. The mobilisation of local networks is also critical. The positive results of Blekinge, for instance, have been attributed to the strong co-operation within the region, including the involvement of the employment office with the sectors of housing, day-care and health.