The Stockholm region's secret for attracting global businesses

This article was produced November 2017 by The Local Client Studio and sponsored by Invest Stockholm.

Learn how cooperation with surrounding towns and regions helps Stockholm attract companies like Amazon and Zalando.

If there’s one typically Swedish quality, it’s a readiness to cooperate. Perhaps it’s down to Sweden’s relative remoteness compared to the rest of Europe, or the fact that the population has only just tipped the 10 million mark.

Whatever the reason, Sweden’s “strength in numbers” mentality has become a surprising secret weapon for the Stockholm region, leading to several international companies choosing to set up operations near the Swedish capital. 

In 2017 alone, German e-commerce giant Zalando chose Stockholm county for its first Nordic fulfilment centre, and Danish stone wool manufacturer ROCKWOOL purchased 180,000 square meters of land in Eskilstuna Logistics Park for its future facility.

And in 2018, cloud computing behemoth Amazon Web Services (AWS) will open three data centres close to Stockholm in Västerås, Eskilstuna, and Katrineholm.

While the three towns hosting the new AWS data centres may all be more than 100 kilometers from central Stockholm, local officials are quick to credit a little-known alliance based in the Swedish capital for helping bring Amazon to their communities.

“Amazon came to us through Stockholm Business Alliance,” explains Eva Lilja, Business Director for Västerås, referring to a voluntary partnership between 55 municipalities in eight counties in and around the Swedish capital.

Founded in 2006, the Stockholm Business Alliance (SBA) has provided members with a range of support services including investment promotion, international marketing, and business climate benchmarking.

When Lilja and her colleagues in Västerås responded to a series of questions from SBA, they had no idea they were courting a global leader in cloud computing.

“The company remained anonymous,” Lilja recalls. “We’d never have reached Amazon otherwise.”

While SBA may not be be well-known among residents of the member communities, it nevertheless plays a vital role in helping deliver insights and contacts to potential investors, giving smaller communities a chance to compete for projects that might otherwise be beyond their reach.

“Being a smaller city we don’t have the resources to compete on an international level,” Lilja explains. 

By joining forces and also having people working for us internationally, we expose our region in a different context.

Eva Lilja, Business Director for Västerås

At the same time, the SBA and the corresponding ‘Capital of Scandinavia’ brand serve as a simple gateway for international investors to gain access, not only the city of Stockholm itself, but also the talent and resources that exist in surrounding communities that aren’t exactly household names outside of Sweden.

“The name came about quite easily because the other cities know that Stockholm is the strongest brand,” explains Olle Zetterberg, CEO of Stockholm Business Region, the municipality-owned company that executes the Alliance’s shared business plan in cooperation with members. “The bigger region also makes it more attractive to investors as we can offer them a more diverse business community.”

Spanning from Gävleborg County north of Stockholm to Östergötland County in the southeast of Sweden and Örebro County in the west, SBA covers a geographic region that extends well-beyond the Stockholm city limits, thus presenting a stronger business offering to international investors.

The SBA model of cooperation also makes it easier for member municipalities to coordinate their efforts when wooing potential new investment to the region, serving as a sort of “one-stop shop” for answering questions and providing guidance to potential investors.

When there are questions or proposals from investors then we work together with the individual cities or municipalities to handle these requests.

Olle Zetterberg, CEO of Stockholm Business Region

“It also means we offer them something much bigger and broader. For example, if you go to Linköping they are very advanced in aviation technology or in Västerås they specialise in robotics.”

And the approach seems to be working.

In the dozen years since SBA’s founding it has helped more and more companies to establish each year, with over 90 set up in 2017 alone.

The smaller municipalities know they may never get foreign investment alone; however, they want to be part of a growing region and recognise if the jobs and economy are growing in the neighbouring municipality then it spreads the economic wealth.

Urbanist Greg Clark, Chairman of London-based intelligence and strategy firm The Business of Cities, is a strong advocate of steps being taken by Stockholm and other members of the SBA.

Clark identifies Stockholm as part of a wave of “globalizing cities” that boast clusters of innovation and strong global identities stemming from “practical actions and competent alliances” like the SBA.

“Many of them are higher-income cities within their respective regions and seek to leverage their efficient infrastructure, improved quality of life, and better security and environmental performance compared to the larger megacities,” he writes of Stockholm and other “globally aspirational cities” in his recent book, Global Cities: A Short History.

Among other things, Clark identifies the SBA’s common brand identity and practical cooperation as key factors in raising Stockholm’s international profile.

“The city’s “Stockholm: Capital of Scandinavia” identity platform has built a new reputation for Stockholm as a city with scale, edge, reach, and relevance beyond its natural borders,” says Greg Clark.

“This alliance of organisations, accessing new opportunities through this global identity, has redefined the city.”