Economic Development and Place Attractiveness: the Case of Karlskoga in Sweden
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Rhiannon Pugh Post doctoral researcher, School of Humanities Education and Social Sciences, Örebro University, Sweden Mats Lundmark Professor of human geography, School of Humanities Education and Social Sciences, Örebro University, Sweden Corresponding author [email protected] Economic Development and Place Attractiveness: The case of Karlskoga in Sweden Keywords: regional economic development, population change, place attractiveness, old industrial towns In this short paper we introduce a research pro- is a town that has experienced something of a ject currently underway exploring the industrial roller-coaster over the past few decades as its development, and accompanying socio-economic economic fate has risen and fallen in various changes, in an industrial town in Sweden: Karl- stages. Because of the dominance in the town skoga. Here we consider specifically the con- of one of Sweden’s oldest and probably best fluence of factors and issues around economic known manufacturing firms, the weapons development on the one hand, and population manufacturer Bofors, the story of the town and migration on the other hand. We illustrate, has been inextricably woven with the chang- through the Karlskoga case of a town that has ing fate of this company. We trace the story experienced profound ups and downs both in its of the company’s establishment and founda- economic trajectory but also in accompanying tion as a major employer in the town, through population and migration trends, the impor- to the crisis in the 1990s for the company and tance of considering these two elements in har- accompanying socio-demographic decline in mony. We posit that to undertake sustainable the town, to the rejuvenation of industry and economic development in the future, old indus- employment in the town today, and accompa- trial towns such as Karlskoga need to centre their nying stabilisation of the population. efforts around quality of life and place attractive- In this paper we present, briefly, the story ness, and not only think of industrial develop- we have pieced together through a combined ment in a narrow sense. This is an introductory programme of qualitative and quantitative work relating to a project which is ongoing. research, in our attempts to tell the economic story of the town. As economic geographers, Introduction our investigations were initially very econ- omy and industry oriented, but as we delved This short paper introduces a case study further into the case study, and spoke to more currently underway into economic transfor- people involved in the Karlskoga economy, we mation in one of Sweden’s oldest industrial realised that the town’s story, and its fragile towns, which is located in a relatively periph- future trajectory, was also a migration story. eral location in central Sweden: Karlskoga. More specifically, we understood that the main The city is an interesting case study through challenge facing the town, and its planners which to examine issues of regional econom- today, is enhancing place attractiveness and ic development, path-dependency, migration increasing the working and living population and employment, and much more, because it of the town in order to sustain the (re)grow- 21 ing industrial clusters that are located there. ventions. The legacy of Alfred Nobel is at the We increasingly realised that we cannot un- heart of how the town of Karlskoga presents derstand economic geography and economic and markets itself to residents, tourists, and development without paying due attention to also to companies, drawing on the rich histor- issues of population and migration. ical and industrial legacy of being the Swed- The paper uses information from a lon- ish residence and commercial centre for the gitudinal geo-referenced micro data on indi- famous man. An active place branding strat- viduals that covers the period 1990–2014. The egy is being pursued in Karlskoga around the database (Bergslagsdata/BeDa) is compiled person of Alfred Nobel. from a number of administrative registers Karlskoga is located in central Sweden, held by Statistics Sweden, and consists of lon- between the cities of Örebro and Karlstad gitudinal information, for every third year, (around 45 minutes travel time from each) for all individuals (16 years of age and old- and around three hours travel from both er) working and/or living in one of the four Stockholm and Oslo. It is still an industri- counties (Värmland, Örebro, Västmanland al town today, with industrial sites, some of and Dalarna) in Central Sweden. We also use which are heavily securitised and inaccessi- information collected from 10–15 interviews ble to civilians, dominating the city centre with representatives from the larger firms and lake-side locations. In addition to the and business associations in Karlskoga. industrial manufacturing and testing sites in the city, just outside Karlskoga is one of Economic History the largest and most accessible commercial testing sites, which companies from all over Our story begins in 1646 when a hammer mill Europe visit to test their products and this was established in Karlskoga, on a conven- represents an important economic source for ient lake-side location, as a company called the town and its resident companies. The Bo- Boofors. The business made bar iron and had fors Test Center (co-owned SAAB and BEA) of- some manufacturing of tools for farmers. The fers, among other things, test firing, destruc- turning point was in 1879 when a man called tion, tests with unmanned aircraft systems, Carl Danielsson managed to make cast steel safety tests and environmental impact. at Bofors which had a strength superior to the Moving to more modern times, perhaps pig iron which had been standard material Bofors is most well known for the Bofors gun. for guns up till then. This made the military Bofors is also well known for a high profile authorities interested and Bofors would soon scandal which caused political turmoil in start manufacturing cast steel for the gun both Sweden and India: a contract signed be- manufacturing firm Finspång in Östergötland. tween Sweden and India in 1986 was found In 1883 Bofors started their own gun manufac- by Radio Sweden journalists to have involved turing firm. In 1884 the first cannon workshop heavy bribes at the highest political level to was opened. These are the roots of the world-fa- Indian politicians. This moment is key in the mous Bofors weapons manufacturer. modern history of Bofors and in our research Around this time, there is a twist in the sto- with those employed at Bofors was pinpointed ry of Karlskoga’s (and Bofors’) development, as the turning point that led to the following when the most famous of Swedes Alfred No- break up of Bofors and ”scattering” of the eco- bel steps into the picture. In 1893 he became nomic system of the town that we see today. interested in finding a company to purchase, In 1999 the other famous Swedish defence and the following year purchased the iron- company SAAB bought the Celsius group, works at Bofors, which soon became the Bo- which was the parent company of Bofors. In fors arms producer we know today. It was not 2000 United Defence Industries (USA) bought only explosives that Nobel tested and devel- Bofors Weapons Systems, the heavy artillery oped in Karlskoga: he also made several other division. Saab retained the missile division. inventions such as artificial silk and leather In 2005 BAE systems acquired the whole of and registered altogether over 350 patents UDI including the Bofors subsidiary. The di- in different countries. But he remains most vide between heavy artillery (to BAE systems) famous for his pioneering work developing and missiles (SAAB) remains today. These are explosives, which were of course used in the now the two large employers in Karlskoga production of Bofors weapons. (outside of public sector activities, of course), The presence of Nobel looms over Karlsk- but the economic system today is much more oga today: its premier tourist and histori- diverse than this. cal destination is the home of Alfred Nobel, So, the previously monolithic company which today houses a museum complete got split into these two parts, but what we with the original, and largely unchanged, discovered upon interviewing actors in the workshops where Nobel developed his in- Karlskoga system is that the story is much 22 3500 100,0 90,0 3000 80,0 2500 70,0 60,0 2000 50,0 1500 40,0 1000 30,0 20,0 500 10,0 0 0,0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Employed 1990 Employed 2014 Cumulative percent 1990 Cumulative percent 2014 Figure 1. Manufacturing workplace structure in Karlskoga 1990 and 2014. Number of employed (left hand scale) and cumulative percent (right hand scale). Source: BeDa/Statistics Sweden. more complex and diverse. The Bofors split ac- fors companies (BAE and Saab). The following tually catalysed a huge amount of change and charts illustrates how the Karlskoga economy diversity in the economic system of the town. has become increasingly characterised by Companies moved in, some from abroad, to several smaller firms rather than the mono- acquire different parts of the old business, for lithic employment structure of the past. The example units of technologies. One example is labour market in Karlskoga was in the early a medical company that acquired technology 1990s clearly dominated by one single work- and staff to make blood centrifuges. A dental place, accounting for roughly 40 % of all man- implant company was created from old Bofors ufacturing employment. In 2014 the largest staff and technologies, also chemical produc- manufacturing workplace had approximate- tion companies. An interesting development ly 10 % of total employment (see Figure 1).