Overview

The Swedish combination of growth and equity objectives reveals a strong regional scope. The three largest regions of the country accounted for 51% of the national population and 57% of the national output in 2005, and contributed to 70% of the national output growth during 1995 2005. At the same time, regional disparities in GDP per capita remain the lowest in the OECD due to Sweden's comprehensive welfare system and ambitious fiscal equalisation system. However, pressure from demographic ageing and the current global economic crisis calls for more cost effective delivery of public services and stronger efforts to fully exploit regional growth potential. Sweden has recently renewed focus on promoting development opportunities in all regions and has introduced a gradual regionalisation process with a strong bottom-up approach. Yet challenges remain, particularly concerning knowledge diffusion and urban-rural linkages. Further efforts to achieve critical mass and improve co ordination can help better address local needs. Reforms to capture complementarities between growth and equity at the regional level will, in the longer term, reinforce Sweden's capacity to remain among the OECD's best performers. Sweden's inclusive policy making culture and the high level of trust among public and private actors and citizens are major assets to make reforms happen. This Review explores the potential for enhanced innovation and entrepreneurship in both urban and rural areas and provides recommendations to strengthen Sweden's regional development strategies through improved governance mechanisms, both regionally and across levels of government. The Territorial Review of Sweden is integrated into a wider programme of national territorial reviews undertaken by the OECD Territorial Development Policy Committee. The overall aim of the territorial review series is to provide practical policy advice to national governments. The countries previously reviewed have been Canada, Chile, the Czech Republic, Finland, France, Hungary, Italy, Japan, Korea, Luxembourg, Mexico, Norway, Poland, Portugal and Switzerland.

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