To better understand the role of the local level in contributing to job creation and productivity, the OECD Local Job Creation review examined local activities in two Swedish regions: 1) Gävle; and 2) Stockholm. This chapter provides a labour market and economic overview of each region as well as the results from an OECD LEED statistical tool which looks at the relationship between skills supply and demand at the sub-national level.

Overview of the regions

As part of this review of local job creation policies, in-depth fieldwork has been undertaken in two local case study areas (Stockholm and Gävle).

Stockholm

The city of Stockholm is the centre of a major metropolitan area with more than two million inhabitants, of which about 900 000 live in the city. The city of Stockholm is in many ways integrated in the planning and collaborative framework of the county of Stockholm. The region for Stockholm of Arbetsförmedlingen runs 11 offices in the city and serves a population of more than one million people.

Like other capitals, Stockholm has a large proportion of major company headquarters and administrative centres. This means that there is a substantial labour market for highly skilled individuals and generally the demand is higher than the supply. The main large export-oriented industries are in Information and Communication Technologies (ICT) and pharmaceuticals, while other major industries are in construction, finance and retail. Stockholm has not been as hard hit as other parts of the country with a more one-sided base in heavy industry. There are at the same time many signs of overheating, such as congested traffic and a scarcity of housing.

Stockholm has a large number of higher education and vocational training institutions, as well as a dynamic sector of secondary education where public and private providers compete for students. There is also a large sector of fee-based education, paid for by individuals or employers.

The most recent planning document was developed for the European structural funds based on other regional planning documents. It points out that skills levels and employment rates are higher than in other European capitals, while in school achievement, the proportion of private companies and the level of integration (of the young and foreign born) is lower in Stockholm (Länsstyrelsen, 2013). Like in other metropolitan regions, there are pockets of areas with higher levels of immigrants and unemployment. There is furthermore a steady inflow of refugees from countries such as Syria and of relatives of other immigrants, which means an inflow of low-skilled labour, for which the demand is generally lower than the supply. These areas have been targeted by local as well as national policies to fight exclusion through skills development projects to bring at risk-groups closer to the labour market.

The city (local government) of Stockholm is a strong actor in the area. It funds all primary and secondary education for youth and a large part of secondary education for adults. It funds substantial programmes for individuals who are outside of the regular labour market and many activities for immigrants. It funds roads and other infrastructure projects and owns housing companies.

There is an informal council for collaboration in this wider area, known as the Lake Mälaren district (Mälardalsrådet), where more than a third of the population of Sweden live (e.g. 3.8 of 9.6 million individuals). The council is especially active in the joint planning of infrastructure, where all local governments have contributed funding out of their local taxes for the new railway tunnel under Stockholm, which will ease commuting and further integrate the labour markets of this region.

Regional economic planning is done by county, which means that the city of Stockholm is part of the planning framework for Stockholm county. The surrounding counties make their own plans, where Gävle is the centre of a county which stretches further north. Employment policy has a different geography, where the city of Stockholm forms its own region (Marknadsområde) with the suburb Lidingö and the island Gotland, while the county of Stockholm is divided into a northern and a southern region and integrated with the nearest counties.

The European regional development fund operates with a third version of regions (NUTS2). Here, the county of Stockholm is a region of its own, while all the surrounding counties (Uppsala, Västmanland, Örebro, Södermanland and Östergötland) form a banana-shaped region around – and much dependent on – Stockholm, known as East Midsweden. Gävle belongs to a set of three counties to its west rather than north (Gävleborg, Dalarna, Värmland) – a different region from the employment policy region, known as ”North Midsweden”.

Gävle

Gävle is in many ways different from Stockholm. The county consists of two sub-regions with very different identities. The southern part (Gästrikland) is dominated by Gävle and the industrial base, while the northern part (Hälsingland) consists of several small towns, where there is a high level of employment in agriculture. Arbetsförmedlingen runs a large office in Gävle, which is co-ordinated by the regional headquarters in Östersund.

It is a provincial capital and a regional centre with a university college and a few national agencies have located their headquarters in the city. However, the county has the lowest level of tertiary education among the Swedish counties. Many young people move to Uppsala or Stockholm for education and work. The level of employment among immigrants is one of the lowest in the country.

The surrounding area of Gävle has a strong industrial tradition in steel, pulp and paper as well as food (e.g. coffee and candy products). Sandvik is a global company, producing materials for car manufacturing and others, located west of Gävle in Sandviken. Pulp and paper is produced in many factories along the coast. Many of these industries have been hit by weakened demand and pressures to cut costs. As a secondary effect, the port of Gävle has laid off people.

The leadership role in regional planning and collaboration has been held since 2007 by a Regional Development Agency set up by the regional and local governments (Regionförbundet Gävleborg). It is merged with the regional government (Landsting) into Region Gävleborg, to take advantage of synergies, including the right of taxation and an elected assembly. The local government of Gävle is a strong actor in the regional as well as the local arena. Like the local government of Stockholm, it funds, among other things, education, infrastructure and programmes for people outside of the regular labour market.

Comparisons across the case study areas

Commuting Patterns

Commuting into Stockholm for employment is extensive from other big cities in Sweden, including Uppsala (200 000), Västerås (140 000), Södertälje (90 000) and Nyköping (50 000), and further cities ...