Great progress since project report was published, will publish asap

1. Reegional DDevelop
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Haallstahammmar, and Sura
a ahamma A cas study in a per-
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101227
M
Michaël Le Duc
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Av
vdelningen f marknad
för dsföring och IT
h
Akaddemin för Hållbar
H
Samhälls- och Teknikkutveckling
Mälaardalens hög
gskola
Box 883
72 23 Västerås
21
tel/mo 021 10 14 02
obil
michaael.le.duc@m
mdh.se
1

2. 1. Introduction
MdH was contacted in 2009 by Sparbankan Västra Mälardalen regarding the need for
a regional analysis concerning the economy of three municipalities (Köping, Arboga
and Kungsör) as well as two neighbouring municipalities (Hallstahammar and Su-
rahammar). Köping, Arboga and Kungsör are a part of the region called West Mälar-
dalen. Sparbankan Västra Mälardalen contributed in the project with many contacts
including the Sixth AP Fund and Arena for Growth with part of the Swedish Associa-
tion of Local Authorities and Regions SALAR/SKL). The economic association Väs-
tra Mälardalen i Samverkan (ViS; West Mälardalen cooperation) unites many differ-
ent organizations for business in Köping, Arboga and Kungsör.
According to the CEO of Sparbanken Västra Mälardalen, Mikael Bohman (2009a),
the economy in the region has been very dominated by the manufacturing industry,
which is in a restructuring phase. This means that the region’s economy needs to be
broadened/diversified including in services, housing and the experience industry.
More small business organizations are also needed.
A case study is being performed in the region of West Mälardalen in the context of
on-going research on innovation and entrepreneurship. Innovation and entrepreneur-
ship are essential in successful business companies as well as for the development of a
region.
Two previous studies carried out on behalf of the Sixth AP Fund have influenced the
project reported herein (Bergstrand et al, 2006; Fägerblad, 2009). In the previous
projects nine different regions in Sweden have being investigated with research ques-
tions used in the current project. Bergstrand et al. (2006) concerns the regions of
Norrbotten, Skellefteå, Siljan, Värmland, Jönköping, Kalmar and Blekinge. Fägerblad
(2009) describes and analyses the regions of Jämtland and Västernorrland, in a growth
perspective. Some comparisons between with these regions and Western Mälardalen
are performed, e.g., concerning the percentage of large companies among limited
companies. Comparisons should be cautious due to significant variations regarding
number of inhabitants in each region and other factors.
Semi-structured interviews have been performed with key respondents in the region.
During meetings and telephone conversations further notes have been performed. Da-
ta on companies in the region from Retriever Business have been analyzed. Data
from Statistics Sweden is also used. The results must be interpreted and analysed with
great caution.
2

3. 1.1. Research questions and purpose
The following research questions are use in the project.
What is the infrastructure in the region?
Which are the region's growth areas?
What is positive for growth in the region?
What is negative for growth in the region (barriers)?
Who are the actors in the work for growth in the region?
How is business characterized in the region?
What are the characteristics of the population in the region?
In a larger context, these questions can be seen as providing information and
knowledge to guide innovation and entrepreneurship.
The purpose of the project is to perform a regional growth analysis for the Western
Mälardalen region (Arboga, Köping, Kungsör) as well as Hallstahammar and Su-
rahammar based on interviews and analysis of business data as well as population
statistics.
3

4. 2. Theoretical framework and previous research
Concepts that explain regional growth can be discussed in a number of sections based
on the Sixth AP Fund's above-mentioned report (Bergstrand et al., 2006).
2.1. Innovation, entrepreneurship and business
Good academic overviews of innovation and entrepreneurship with high relevance for
practitioners include Bessant and Tidd (2007) and Dorf and Byers (2007). Dorf and
Byers (2007) is practically oriented with examples of business plans, accounting ex-
amples (e.g. how the balance sheet and income statement can develop for a new busi-
ness), financial calculations and a large number of checklists to support practitioners.
Entrepreneurship should be related to innovation since successful companies in the
short and long term, according to extensive research, are innovative (Bessant and
Tidd, 2007, p. 5; Utterback, 1994). According to Bessant and Tidd (2007, pp. 24),
innovation can occur in different areas, mainly products (services), process, position
(market) and paradigm. Tripsas (1997) illustrates Joseph Schumpeter's concept of
"creative destruction" in the typesetting industry where clear technology life cycles
follow each other. In each technology shift new skills are required, such as in digital
technology and software development. Meanwhile, older knowledge can become ir-
relevant.
Innovation can be divided into incremental and radical innovation. Radical innova-
tion is significantly less frequent than the many incremental improvements that are
constantly performed on products, services and processes.
Entrepreneurship occurs both in established companies and new businesses. All entre-
preneurs are not interested in the growth of their company. Some people see entre-
preneurship as a lifestyle, e.g., consultants, home based business and restaurants (Bes-
sant and Tidd, 2007, pp. 256).
A company's management team is essential for being successful. Bessant and Tidd
(2007, p. 52) use a survey from 1992 concerning criteria used by venture capitalists to
evaluate investment proposals from entrepreneurs. The entrepreneur/management
team is considered very important. The entrepreneur must be able to manage risk,
have demonstrated perseverance, have good market knowledge, have shown leader-
ship abilities and produced good results. Other key areas are product-related factors,
such as product prototype works, the product demonstrates market acceptance, the
product is owned by the firm and is protected or can be protected. Market with high
growth rate is also important. Similar research can be found in Muzyka and Birley
(1996) as well as Zider (1998).
2.2. Growth and Sustainable Development
Economic growth is a complex and diverse area with many concepts and definitions.
Gross domestic product is used at the macro level of a country (see SOU 2002:118).
4

5. At the company level, economic growth is measured in various ways such as
• Number of employees
• Sales
• Market shares of different products and services in different regions
• Assets
• Share value
In recent decades, interest in sustainable development has increased, including in the
business world.
It is interesting to investigate which indicators for innovation and economic growth
are used, or could be used by researchers as well as decision-makers in business (in-
vestors etc) and government at different levels. Indicators of innovation and growth
from the project PRIM at MdH (number of companies participating in pro-
ject/programme, new companies, new jobs, new arenas for meetings, the number of
companies in coaching activities, etc.), Automation Region (number of new jobs,
number of new companies, number of projects, number of meetings, etc.).
Tillväxtanalys calculate among other indicators the number of new companies per
1000 inhabitants. For 2009, for example, Köping 1.6, Västerås 2.0, Kungsör 2.3,
Eskilstuna 2.2, Malmö 3.5 and Stockholm 3.8 new companies per 1000 inhabitants.
2.3. Regional development and growth
A geographic location where a business and/or a family is situated is usually part of a
municipality, which in turn can be part of different types of regions. Mälardalen is a
well know regional term, at least in Sweden. Bergslagen, Stockholm, Scandinavia,
Europe, the Baltic, illustrate that we analyse geography in different ways, with differ-
ent perspectives. From an innovation perspective, people try to relate what is not fa-
miliar with what is familiar. If you want to market a town and region to potential cus-
tomers it is much more costly to use a name that is not familiar as compared to a name
that is familiar. For example, the town of Arboga is both part of the region West Mä-
lardalen, the logistics region Örebro, which includes the municipalities of Örebro,
Hallsberg, Kumla and Arboga (Örebro, 2009), as well as the Stockholm Business Al-
liance. For a person from Russia, Stockholm is a more familiar term than Arboga. For
the concerned market segment (Russians) it is therefore easier to market Arboga as
part of the larger region that includes Stockholm than just Arboga or West Mälarda-
len. West Mälardalen on the other hand, is an established term in the region itself and
is being more and more recognised by people in Sweden.
In a previous project (Le Duc and Sivertun, 2007) it is noted that municipalities in a
region can cooperate in the field of emergency management and civil protection, e.g.,
a joint Fire and Rescue Service facility. Municipalities cooperate also in marketing the
region(s) they are part of to attract new business, to develop existing business as well
as for other purposes like attracting inhabitants to the region. If there is an inquiry
about available facilities (factory and office space) to Arboga, and they do not have
that available but Köping have the requested facilities then it is beneficial for the re-
gion that the town of Arboga recommends the possibilities in the town of Köping.
5

6. A region's attractiveness is about a whole set of factors in terms of infrastructure, jobs,
housing, municipal services, variety of products and services, cultural and leisure ac-
tivities , and so on.
Firms in a region cooperate with each other in networks and clusters. To get contracts,
small firms can cooperate. Large firms can cooperate with more flexible small firms.
Small firms lack the resources of large firms and economies of scale, which can be a
basis for cooperation. (Bessant and Tidd, 2007, p. 265)
With globalisation, networks are increasingly international, highly supported by so-
phisticated developments in ICT.
In a scientific investigation about how people use mental maps to plan a route, re-
spondents were asked to draw on paper the route they use to navigate in a town. A
person familiar with the town uses street names like in navigation software. A person
not familiar with the town does not know the street names so much and usually navi-
gates with the help of landmarks, for example a Japanese visitor to a city in Sweden
navigate geography with the help of a Yamaha shop, the railway station, and the bo-
tanical garden (Daimon, T., M. Nishimura, et al., 2000). This pattern illustrates nicely
the principles of Constructivism (Le Duc, 1996).
Bolman and Deal (2008) suggest that in management and leadership at the company
level, you need to combine different frames/perspectives, i.e., the structural frame, the
human resources frame, the symbolic/cultural frame and the political perspective.
Similar ideas should be possible to apply for a municipality and region. Companies
are established and managed by people who are entrepreneurs. Entrepreneurs need
proper infrastructure, financial institutions, support from government (local, regional,
national, international), customers, partners, employees, etc.
2.4. Clusters and networks
Research on business clusters and networks is very comprehensive with high political
interest at all levels. One definition from Dorf and Buyers (2008, p. 167) is relevant:
“A cluster is a geographic concentration of interconnected companies in a particular
field. Clusters can include companies, suppliers, trade associations, financial institu-
tions, and universities active in a field or industry”. Dorf and Buyers (2008, p. 167)
mention the Hollywood cluster of firms and infrastructure cooperating in creating
movies. There are many other famous clusters in the world such as Silicon Valley, the
manufacturing clusters in China, diamond trade in Antwerp, spice trade in India and
the wine district of Bordeaux. Bessant and Tidd (2007, p. 135) mention that the town
of Sialkot in Pakistan plays a significant role in the market for specialized surgical
instruments made of stainless steel. 300 small businesses with the support of 1500
even smaller suppliers had in 1996 a 12% share of world market.
Successful entrepreneurs create and sustain networks inside and outside their compa-
ny/companies to implement their vision(s). For example, James Cameron (2010) crea-
tor of the blockbuster movies Terminator II, Titanic and Avatar, in an inspiring speech
on TED recounts his life history, what is driving him and how he successively became
more and more successful in the movie industry. “So, what can we synthesize out of
all this? You know, what are the lessons learned? Well, I think number one is curiosi-
ty. It's the most powerful thing you own. Imagination is a force that can actually man-
6

7. ifest a reality. And the respect of your team is more important than all the laurels in
the world."
According to Jan Sandred from Vinnova (Sandred, 2010), “The process of clustering
can occur naturally, through many individual decision makers across companies, or-
ganisations, research institutions, and public bodies making independent decisions. In
addition, the experience of many countries and regions suggests that public cluster
policies can be an effective tool to steer and improve the outcomes of structural
change. Cluster initiatives can now be found everywhere around the world, and many
such initiatives exist or are being launched throughout the EU ... Between 30% and
40% of all employment is in OECD industries … concentrate, or ‘cluster’, regional-
ly.” There are 1200 cluster organisations in the European Union, according to Vinno-
va.
Henry Chesbourough has introduced a model of open innovation where firms and
other parties cooperate in all phases of innovation in flexible ways. Even large estab-
lished firms can sell, license or create spin-offs from ideas generated by them if the
ideas do not fit in their core strategy and business model or to create a more agile or-
ganization around a business by cooperating with small business.
2.5. Resource Based View and related concepts
The resource based view (RBV) is of high interest in the field of entrepreneurship.
Barney (1991, 1994) is often cited with his VRIO acronym for resource attributes at
the firm level. Resources should be valuable, rare, costly to imitate, and organised and
distribute optimally internally in the organisation (Hedman and Kalling, 2002, p. 75).
Edith Penrose is influential in the RBV literature (Penrose, 1959) and is clearly relat-
ed to growth, as illustrated by her influential book’s title "The Theory of the Growth
of the Firm." According to Penrose (1959 in Linnskog, 2007, pp. 111) resources are
not the "input" in the production process but it is the services that resources can gen-
erate that matter. For example, a company's top management is a useful resource only
when it develops the company so that the company is growing with good profitability.
Your track record is not sufficient to succeed, which applicable both to business man-
agers and the movie industry.
A company to grow needs and develops resources of various kinds, e.g.
 Fixed assets such as buildings, machinery and IT systems
 Current assets such as inventory, accounts receivable and cash
 Capital
 Brand(s)
 Staff
 Patents and other Intellectual Property
To attract the best personnel is essential for a successful company. In addition, struc-
tures need to be created to develop and retain the best employees. (Bolman and Deal,
2008, pp. 142)
Jim Andersén’s (2005) doctoral thesis deals with strategic resources, i.e., resources of
a firm that lead to long-term profitability relative to its competitors. Jim Andersén is
7

8. also examining how profitable companies protect themselves against being imitated.
The study included 14 small and medium-sized manufacturing companies, especially
from the Eskilstuna-region. The results show that entrepreneurs who dare to think
outside the box and take risks are more successful than traditional small business.
Successful business leaders have clearly stated objectives with their business at an
early stage. They also have a dynamic vision of the firm’s resources and their envi-
ronment. The successful companies are therefore innovative which confirms Bessant
and Tidd’s work is (2007) previously mentioned and the rich body of research around
the world on innovation.
2.6. Population and demography
The population of a region is a very important resource. It is important to attract
skilled people, including entrepreneurs, engineers and marketing professionals.
It is also important to keep young people living in the region that participate in devel-
oping existing business and other professional areas as well as starting new compa-
nies.
However, with improved infrastructure (roads, railroads, ICT), people can choose
more and more where they want to work and live.
8

9. 3. Method
Telephone interviews, personal interviews and observation are performed in the pro-
ject, combined with the collection and analysis of data from the database Retriever
Business and Statistics Sweden (SCB).
The questions asked during the interviews are based on the theoretical framework
above, and two reports of the Sixth AP Fund (Bergstrand et al., 2006, Fägerblad et al.,
2009). There are only a few questions that are quite broad to enable the respondents to
speak freely about the themes of the research project, thus enabling information and
themes to emerge. M
The selection of respondents has taken place using a relevance criterion, and accord-
ing to the informants who have been willing to participate.
Data have been processed in Excel, Access, SPSS and Nvivo.
The results must be interpreted with great caution. We are dealing with complex is-
sues and the many regions around the world cannot be compared in simple ways. Pat-
terns and recommendations to decision-makers in business and governments need to
take into account the history of each region, its current structure, and many other fac-
tors. Some topics are more general than others. Specific topics include the industries
in the region and its history. General topics include how to promote entrepreneurship
and business growth as well as obstacles for entrepreneurship.
9

10. 10

11. Results and analysis of interviews
Below is a selection of results from interviews. Detailed interview results are availa-
ble.
3.1. Respondents
The following interviews were carried out with the aid of a questionnaire with general
questions.
Company/organisation Respondent Position Acronym
Sparbanken Västra Mä- Mikael Bohman CEO MB
lardalen, Köping
Promedia i Mellansveri- Kjell Johansson Director of marketing KJ
ge AB
Porthén Consulting AB, Håkan Porthén CEO HP
Köping (Kolsva)
Surahammars Sabine Dahlstedt Information and busi- SD
municipality ness issues
Köpings municipality's Pia Norstedt Director of business PN
development
Hallstahammar Promot- Susanne Sedvall Project manager SS
ion and Sedvalls Affärs-
utveckling AB
Västra Mälardalen i Håkan Sterner Project manager HS
Samverkan
Arboga municipality Göran Dahlén Director of business GD AG
Annika Gus- development
tavsson (same Secretary of business
interview by tele- development
phone)
Kungsör municipality Bo Axelsson Director of business BO
development
Västerås Science Park Ann Lystedt Project Manager AL
Patrik Jablonski Project Manager PJ
Interesting notes have been taken during meetings and telephone conversations with
other informants.
3.2. Infrastructure in the region in terms of communica-
tions (road, railway, air, etc.)
 all respondents say that road transports are excellent
 rail communications is also a strength factor
 moreover, the possibilities of air transport are good
 the municipalities’ geographical position is a strength factor. Arboga has been
a junction since the Middle Ages
 in Köping there is a deep harbor
 logistics is mentioned as a growth area
11

12. 3.3. The region's growth areas
The following are the main growth areas according to respondents.
 housing
 sustainable development
 interior design
 logistics
 small business
 manufacturing
 services
 experience industry
3.4. What is promoting growth?
The area success factors for growth is comprehensive in the interview data. The main
factors mentioned are.
 attitudes
 population
o people with good knowledge and skills
o good health
o champions (enthusiasts)
 entrepreneurship
o mistakes should be allowed
 flexibility
 infrastructure is good
 capital
 municipalities play a key role
o service levels
o quick decisions
 long-term perspective needed
 marketing
 networks
 cooperation
 small business play a central role
 systematic method needed
 education and training are important
 Western Mälardalen has a good strategic geographic position
12

13. 3.5. Obstacles to Growth
Many obstacles are opposite to the success factors mentioned above
 many obstacles
 attitudes
 traditional industrial base
 industrial town thinking
 shortage of manpower with required skills
 lack of entrepreneurship
 lack of capital
 lack of cooperation
 major companies controlled and managed outside the municipality/region
 education
 Western Mälardalen not so well known
During the winter of 2010 and the winter of 2011 there have been many problems
with railway transports in several parts of Sweden, which can be seen as an obstacle.
3.6. Who are the actors in the development process of
the region?
Interview results were analyzed and are illustrated in the following figure.
KY = Advanced Vocational Education
The number of networks is substantial which is illustrated by making the portion of
the figure on networks larger than the other parts.
The main funding agencies/sources are indicated by stars.
13

14. 3.7. What are the characteristics of business in the re-
gion?
Very interesting results emerged in the interviews which can be related to the data
analysis from predominantly Retriever Business and SCB in the project.
 industry needs to be broadened
 manufacturing
o dominates
o recession
o staff reductions /restructuring
o manufacturing - uncertain future
o manufacturing - requires specialization
 service companies (growth)
3.8. What are the population characteristics in the re-
gion?
Main themes that have emerged in the interviews
 many redundant
 migration to larger cities
 Western Mälardalen is a region for commuting
 young people come back when they found a family
 aging population
 education level is lower than the national average
3.9. Information about the topics discussed by selected
respondents
Mikael Bohman discusses mainly that
 housing is a growth area
 collaboration and marketing is important for growth
 Western Mälardalen is well situated geographically
 that the region has industrial town traditions is an obstacle
Here is a diagram from Nvivo regarding the interview transcript Mikael Bohman
14

15. Håk Sterner says chiefl that
kan r ly
 the experience indu
ustry is a ve importan area of gr
ery nt rowth for th region
he
 sustaina develop
able pment is immportant
 you hav to be syst
ve tematic and have a lon
d ng-term pers
spective
 housing is a growth area
g h
An N
Nvivo analy illustra the inter
ysis ates rview transc
cript with Håkan Stern
H ner
Sus
sanne Sedva says in essence that
all e t
 networrking is esse
ential to fost growth
ter
 industr town cu
rial ulture is an o
obstacle
 you have to have the right att
t titude
 oration with university colleges an universiti should b develope
collabo h nd ies be ed
15

16. Nvi analysis of the interview transc
ivo r cript Susanne Sedvall
n
16

17. 4. Results and analysis data from Business Data, Re-
triever Business, Arena for growth and SCB
Here data are reported on regional and municipal levels.
Note that data from different databases must be interpreted. For example, a company
registered in a municipality can encompass employees working outside the municipal-
ity. Plantagen Sverige AB based in Köping has 449 employees under the registry.
About 25 people work in Köping according to a telephone contact with the company
in January 2010. There are also companies registered in other municipalities than
those surveyed who have staff located in Western Mälardalen. Volvo Powertrain AB,
legally based in Gothenburg (5,486 employees 2008), for example, have approximate-
ly 800 employees in Köping according to Pia Norstedt, business manager, Municipali-
ty of Köping (contact 100107). Tibnor AB based in Solna has a total of 862 employ-
ees (2008), of which approximately 220 are working in Köping according to Pia Nor-
stedt.
4.1. Arena for Growth relevant analyses
Arena for growth contributes to the project with interesting analyses. Köping, Arbo-
ga, Kungsör and Hallstahammar are included in the analyses.
 population 1998-2008
o not the worst development, but lower than average
 sales development 2003-2008
o region is similar to the average with the exception of Arboga (lower)
and Kungsör (higher)
 start of new businesses
o low
 house price development
o slightly below average in the group
 percentage of population highly educated
o low for all the municipalities
 construction of the new houses and buildings
o low for all the municipalities except Hallstahammar
 unemployment in the age group 18-24 years 2009
o around or above average (14.8-17.6% for Köping Arboga and
Kungsör)
17

18. 4.2. Tables with data from Retriever Business and SCB
Date have been downloaded and analysed from Retriever Business and statistics Swe-
den.
4.2.1. Number of companies / organizations per municipality
Compa- Arboga Hallsta- Kungsör Köping Sura- Sum
ny/organisation hammar hammar
Sole Trader 988 889 671 1 772 546 4866
Limited company 344 394 212 652 187 1789
Partnerships and 130 104 73 220 63 590
limited partner-
ships
Associations 74 83 26 124 36 343
(ideella fören-
ingar)
Housing Associa- 5 19 3 28 13 68
tions
Simple compa- 19 11 10 26 1 67
nies (Enkla bo-
lag)
Economic Asso- 11 20 5 22 9 67
ciations
Communities 5 9 4 16 2 36
(housing)
Branches with 2 5 6 1 14
foreign owner
Foundations and 2 7 4 2 15
funds
Other legal forms 3 2 1 2 3 11
of companies
State and local 1 2 1 2 6
companies
Source: Retriever Business
Number of companies > 7000. For Arboga, Köping och Kungsör approx. 5.500 com-
panies.
A large number of small companies are noted since sole trader companies are usually
small. Data for companies that are not limited (aktiebolag) is quite incomplete. Note
also that not all companies are active.
18

19. 4.3. The distribution of the number of companies per
turnover group (limited companies)
Net sales (thousands of SEK) Number of companies Percentage
>100 000 48 3.0
20 000-100 000 135 8.5
10 000-20 000 96 6.0
5 000-10 000 195 12.3
0-5 000 1115 70.2
Sum 1589
Companies without revenue in 159
the database
Source: Retriever Business
This analysis is for limited companies. In Western Mälardalen there is a higher per-
centage of large companies compared to the seven regions described and analyzed in
the Sixth AP Fund Report (3% compared with 1.7% annual sales exceeding 100 mil-
lion SEK; Bergstrand et al., 2006). In Western Mälardalen 70% of the companies
have a turnover between 0 and 5 million SEK compared with approximately 77% for
the seven regions.
The indicators above confirm interview results.
19

20. 4.4. Industries with the highest number of registered
companies and employees in the region of Western Mä-
lardalen
Below is a list of sectors for limited companies ranked by the highest number of com-
panies in the region.
Data have been processed in Microsoft Access
Sector (SNI) Num- Number Rank by Rank by
ber of of em- number number
com- ployees of com- of em-
panies panies ployees
Construction, Design & 252 1168 1 2
Fitting Operations
Manufacturing & indus- 225 5511 2 1
trial
- 151 311 3 9
Retail 121 1023 4 3
Wholesale 113 806 5 5
Transportation & ware- 101 502 6 7
housing
Real estate activities 98 566 7 6
Agriculture, forestry, 62 297 8 10
hunting & fishing
Repair & Installation 62 216 9 12
Legal services, finance 62 177 10 15
& consulting
Source: Retriever Business
We see here that the manufacturing sector employs many people in limited compa-
nies, even if not all operate in the region.
Manufacturing is important for Sweden. According to Statistics Sweden (2010), the
field of engineering goods represented around 442 billion SEK of export revenue, or
44.3% of total merchandise exports in 2009.
Many activities can be categorized as services. Some areas could also be classified as
part of the experience industry. Note that the manufacturing sector includes services
of various kinds internally and externally at the company level.
20

21. Number of companies with legal form of sole proprietorship by industry.
Industry Division Number of Rank
companies
-- 1568 1
Agriculture, Forestry, Hunting & Fishing 1113 2
Construction, Design & Fitting Operations 422 3
Retail 194 4
Manufacturing & Industrial 187 6
Repair & Installation 128 6
Hair and Beauty 121 7
Culture, Entertainment & Leisure 113 8
Legal, Finance & Consulting 113 9
Wholesale 110 10
Real estate activities 104 11
Health & Medical 89 12
Transportation & Warehousing 84 13
Hospitality (Hotels and Restaurants) 83 14
Computers, IT & Telecommunications 82 15
Source: Retriever Business
When comparing the two tables above we note that “Agriculture, Forestry, Hunting &
Fishing” is quite significant but that the sector consists of many small firms with the
legal status “sole proprietorship”, thus exposing the owners to personal financial risks.
The sector contributes to the “experience industry” by maintaining the landscape in
attractive ways and providing for products to be appreciated in many ways. Hospitali-
ty comprises few firms but they have an important impact on the attractiveness of a
region. “Construction, Design & Fitting Operations” is important in both tables,
which confirms interview results.
21

22. 4.5. Number of companies by year of registration and in
relation to population
This analysis is available in the regional analyses previously mentioned (Bergstrand et
al., 2006). We asked a respondent working in the region (Bo Axelsson) how to inter-
pret the analysis. Bo Axelsson says that information about started companies must be
interpreted with caution.
Number of companies by year of registration (active companies). Five municipalities
Antal företag
2008
2005
2002
1999
1996
1993
1990
1987
1984
1981
1978
1975
1972
1969 Antal företag
1966
1963
1960
1957
1954
1949
1946
1943
1935
1932
1910
1845
0 50 100 150
Source: Retriever Business
According to Bo Axelsson, Kungsör municipality, the figure above is very difficult to
analyse. At NyföretagarCentrum, how many businesses have been registered in a year
has been measured, it is a very blunt measure. Many times, companies have been
started for strategic reasons. There are people who have do not want to end up in the
local newspapers in the case of bankruptcy, etc. For financial and accounting reasons
there can also be changes in companies’ legal status and geographical location.
22

23. Many of the active companies in the population are recent, which can reflect the high
failure rates in new business ventures. Statistics vary, especially between different
types of business, e.g., restaurants vs. accounting firms, and the background of the
founders. The management team matters to be successful in business (Bessant and
Tidd, 2007, p. 52) That the population concerns limited companies is reflected that
relatively many companies are between 10 and 20 years.
A correlation analysis was carried out in SPSS between different industries. Number
of companies (all types of businesses and organizations in the Retriever Business for
five municipalities) that are registered each year by industry (division), positive corre-
lation, 1845-2010, active companies.
Business sector Pos. Cor- Pos. Kor- Pos. Pos.
(Bransch huvudgrupp) rel. rel. Korrel. Korrel.
Retail Manufact. CEL¤ CDF¤
Banking, Finance & Insurance ,505*
Industry, Employer & Occupation organi- ,622 ,812** ,448**
sation
** ** **
Construction, Design & Furnishings Busi- ,765 ,821 ,488 1
ness
Computer, IT & Telecommunications ,451* ,430*
Retail 1 ,750** ,529** ,361**
** **
Real estate activities ,650 ,718 ,513**
Business Services ,604*
** **
Hospitality (hotels and restaurants) ,667 ,501 ,783** ,465**
Hair & Beauty ,534** ,377* ,269*
Health & Medical ,686** ,416* ,451* ,454**
** **
Agriculture, Forestry, Hunting & Fishing ,591 ,727 ,406**
Law, accounting & Consulting ,679** ,634** ,391** ,416**
** **
Arts, Entertainment & Leisure ,529 ,545 1 ,574**
Media
Motor vehicles Trade ,719** ,486*
Wholesale ,609** ,626** ,435**
Advertising, PR & Market Research
Repair & Installation ,638** ,595** ,299* ,609**
Technical Consulting ,510** ,644**
**
Manufacturing & Industrial ,750 1 ,478** ,624**
Transportation & Warehousing ,621** ,713** ,530**
** *
Education, Research & Development ,574 ,431
Rental & Leasing ,793**
Other Consumer Services ,659** ,478** ,653**
**. Correlation is significant at the 0.01 level (2-tailed).
*. Correlation is significant at the 0.05 level (2-tailed).
¤
CEL = Culture, Entertainment, Leisure
CDF = Construction, Design & Furnishings Business
23

24. A preliminary analysis shows that the interviews are confirmed regarding the im-
portance of the sectors “Manufacturing & Industry" as well as "Construction, Design
& Furnishings Business" in the economy of the region. It is likely that if business is
going well for these industries, that benefits many other sectors. Retailing is an im-
portant part of the economy which is related to the services mentioned as a growth
areas by several respondents. "Culture, Entertainment & Leisure" play some role,
even if the industry does not have a high turnover compared to manufacturing. "Cul-
ture, Entertainment & Leisure" includes 16 limited companies with 29 registered em-
ployees and a turnover of SEK 30 million in total (information about sole trader com-
panies is limited).
For the region, public employers are not included in the study, they are very im-
portant. In the Köping Municipality website there is information about swimming,
museums, libraries, boating, movies, outdoor activities, music and theater, etc. (ap-
proximately 11 different categories of activities in the cultural and recreational area).
A region's attractiveness is about a whole set of factors in terms of infrastructure, jobs,
housing, municipal services, variety of products and services, cultural and leisure ac-
tivities , and so on. Furthermore, Köping, Arboga and Kungsör are part of a larger
region than West Mälardalen where additional resources, activities and experiences
are available within reasonable distance (Örebro, Eskilstuna, Västerås, Skinnskatte-
berg, Uppsala, Stockholm, etc.).
It would also be interesting to analyze information about companies that are being
closed due to bankruptcy, merger, being shut down without bankruptcy, and so on.
Number of limited companies in relation to the number of inhabitants in each munici-
pality
Number of Number of Number of
companies inhabitants inhabitants
(limited) per company
(limited)
Arboga 302 13301 44.0
Hallstahammar 348 15014 43.1
Kungsör 175 8170 46.7
Köping 599 24740 41.3
Surahammar 170 10062 59.2
1594 71287 44.8
Sources: Statistics Sweden and Retriever Business
Compared to the seven regions in Bergstrand et al. (2006) the average for the five
municipalities above is slightly higher. Surahammar’s indicator is quite high which
indicates that a few large employers play a significant role in the local economy. The
indicator above for Surahammar is similar to a few small towns in Värmland county
(Filipstad, Forshaga and Grums). In Surahammar 5 companies employ approx. 53%
of all registered employees in limited companies (749 out of 1417) which makes the
municipality vulnerable.
24

25. 4.6. Population
Population 2004-2008
Population
2004 2005 2006 2007 2008 2004-2008
Arboga 13406 13380 13391 13369 13301 -105
Hallstahammar 15038 14955 15042 15040 15014 -24
Kungsör 8287 8303 8211 8219 8170 -117
Köping 24677 24646 24659 24646 24740 63
Surahammar 10249 10196 10109 10122 10062 -187
71657 71480 71412 71396 71287 -370
Source: SCB
We see in the population data above that there have not been dramatic changes in re-
cent years. On the other hand the demographic chart below is quite clear.
The age structure of the region (five municipalities) 2009
95+
85‐94
75‐84
65‐74
55‐64
45‐54 Kvinnor
35‐44 Män
25‐34
15‐24
5‐14
0‐4
0 1000 2000 3000 4000 5000 6000
A notable difference with some of the seven regions of the Sixth AP Fund Report by
Bergstrand el al. (2006) is the age group 25-34 years. For the Skellefteå region in-
cluding Umeå there is not a deviation in the graph as above, but if we remove Umeå
there is a dent. The Siljan Region, Värmland County, Jönköping and Kalmar com-
prise also a notable pattern in the age group 25-34 years which is not the case for Ble-
kinge County. The researcher noted this pattern and verified in Bergstrand el al.
(2006) as noted in that report, e.g. pages 16-17. For Western Mälardalen the notch is
relatively deep. In relation to Sweden as a whole the age group 55 to 64 is relatively
large compared to the other age groups in the region (SCB, 2009).
25

26. 4.7. GIS, geographical correlations and cluster analysis
Here are a few samples on visualization and analysis that can be performed with GIS.
First there is correlation matrix that can be related to the GIS maps.
Correlation Matrix for the number of companies per zip code based on the industry is
an idea of the author. Based on the matrix, the following possible clusters are ob-
served.
Business sector Pos. Korrel. Pos. Korrel. Pos. Kor- Pos. Kor-
(Bransch huvudgrupp) Retail Manufact rel. rel.
CEL¤ CDF¤
Industry, Employer & Occupation organisation ,777** ,419** ,415** ,448**
Construction, Design & Furnishings Business ,268 ,624** 1
Computer, IT & Telecommunications ,824** ,414**
Retail ,770** ,361**
Real estate activities ,662** ,513**
Health & Medical ,441* ,454**
Hair & Beauty ,691** ,195
Hospitality (hotels and restaurants) ,369 ,465**
Agriculture, Forestry, Hunting & Fishing ,406**
Law, accounting & Consulting ,557** ,416**
Arts, Entertainment & Leisure ,478** 1 ,574**
Media 1 ,268
Wholesale ,467* ,538**
Advertising, PR & Market Research ,776**
Repair & Installation ,653** ,435**
**
Manufacturing and Industry 1 ,478 ,624**
Transportation & Warehousing ,519** ,530**
Rental & Leasing ,797** ,594* ,793**
Other Consumer Services ,296 ,653**
**. Correlation is significant at the 0.01 level (2-tailed).
*. Correlation is significant at the 0.05 level (2-tailed).
¤
CEL = Culture, Entertainment, Leisure
CDF = Construction, Design & Furnishings Business
"Construction, Design & Furnishings Business" is available in many areas, thus con-
firming the interview results. "Manufacturing and Industry" does not seem to exist
where consumer sectors are present, such as retail. An interesting note is that there are
companies in the "Culture, Entertainment & Recreation" in some of the areas where
companies in the "Manufacturing & Industry" are located. We can also observe that
“Manufacturing and Industry” is present where there is “Wholesale” business but not
“Retail”, “Hair & Beauty”, “Hospitality”, “Media” and other sectors that are more
“downtown” than factories.
26

27. Nummber of organizations per postcode area (all companies and organisa
p de c a ations). Da
ata
on c
companies a organiz
and zations: Retr
riever Businness. Maps: DPS and N
Navteq.
27

28. Sele
ected busine sectors in Arboga, n
ess i number of companies (all types) b zip code.
c ( by
Data on compa anies and or
rganizations Retriever Business. Maps: DPS and Navteq
s: M S q.
The map of Arb
e boga above confirms t correlati analysis For examp where
e, the ion s. mple,
ther is a large concentrati of retail businesses, there are relatively fe manufactur-
re ion l r ew
28

29. ing companies. In the coun
. ntryside, the is more agriculture, forestry, h
ere hunting and
fish
hing. Where there is sig
gnificant ma anufacturing business, there are als businesses in
g t so
construction, d
design and fuurnishing, a well as re estate activities.
as eal
ected busine sectors in Köping, N
Sele ess i Number of companies, Selected se
, ectors relate to
ed
Mannufacturing (with or wi ithout positi correlat
ive tion, sectors of significa
s ance regardding
corr
relation patt
terns and relative impoortance of nu
umber of co ompanies)
29

30. The map of Kö
e öping above confirms t correlati analysis In the sou Byslätte
e, the ion s. uth, ens
indu
ustrial area (post code 731 36), ma
7 anufacturing is located together wi construc
g ith c-
tion design and furnishing real estate activities as well as wholesale bu
n, d g, e w usiness.
Dow wntown we can see tha retail busi
at iness is posi elated with h and beauty
itively corre hair
(pos code 731 32 West of Torggatan) although not everyw
st f ), where, e.g., p code 73
post 31
30 b the hospi (Köping Lasarett) . For post code 731 32 there is alm no com
by ital gs c most mpa-
ny i Transport
in tation and Warehousin There are quite a nu
W ng. e umber of com mpanies in
agriiculture, hunnting and fishing regist
tered in the urban area of Köping, which illus s-
trate that the s
es sector ranks high in the total numb of companies regist
e ber tered in the
stud region as a whole. However, t mention sector is not statisti
died the ned s ically relate to
ed
the other sector in the ma Post Cod 731 98 in the South (by Norsav
rs ap. de n vägen) is in the
outsskirts of the urban area of Köping, where ther is very lit retail bu
e , re ttle usiness but
man companies in Agricu
ny ulture, Huntting and Fis
shing, Construction and Design, Man-
d M
ufaccturing, Rea Estate wa well as Tr
al as ransportatio and Ware
on ehouse.
30

31. Sele
ected busine sectors in Kungsör (same secto and map legend as t map abo
ess i ors p the ove
for K
Köping)
The patterns in this town are similar t the two other towns above. The map discon
e n a to o n-
firm somewha the interv
ms at view with th municipa
he ality. The sector of cons
struction, de
e-
sign and furnishing is important for th municipa
n he ality.
Agr
riculture, Fo
orestry, Hun
nting and Fi
ishing, Num
mber of com
mpanies
It is not surpris
s sing to note that most c
companies in the area of agricultur forestry,
n o re,
hun nting and fis
shing are loc
cated outsid the urban areas of th municipa
de n he alities.
31

32. Num
mber of employees (primarily limi ted companies), all sectors
p i i n c
32

33. 5. Conclusions
One conclusion of the project is that the scope of the project, the method and the re-
sults can be developed much further. It would for instance be interesting to perform
one or more surveys based on the interview results. Furthermore, the present report
can be viewed as part of a case study or action research. Students and Ph.D. candi-
dates can carry out interesting projects and use the methods developed in this project.
A key conclusion from the project is that it is important to establish reliable indicators
of entrepreneurship and regional economic development. There are many different
indicators that are used by researchers, government and investors to compare and rank
different business sectors, municipalities, regions, and specific companies. Some indi-
cators are more reliable than others. For example, the number of new business estab-
lished in a town is uncertain indicator for the economic situation.
Interviews have been performed with key people in the region. It would require many
more interviews to clarify the knowledge that has been developed in the current pro-
ject. In addition, each municipality should be described and analyzed in more detail.
By analysing the various sources of information and types of analysis, it is possible to
confirm and make more precise each source of information. Descriptive statistics,
correlation analyses, examining the GIS maps and interview data can be related to
describe and analyse the business structure of the region, opportunities, obstacles, the
population, and many other factors.
Some preliminary conclusions are noted here with caution.
The region has a favourable location with very good infrastructure (road, rail, air,
ship/boat, etc.), although problems are noted regarding railway communications dur-
ing 2010 and 2011 (winter season). Western Mälardalen is a hub. Surahammar is a bit
further away from the highway E18, but has many assets.
Growth areas that clearly emerge from the interviews, but that also are visible in data
from Retriever Business are housing, logistics, services and the experience industry.
The manufacturing industries must develop positively. However jobs related to the
production of simple components and products are likely to move to low cost coun-
tries. The experience industry is hoped by many to create employment but you need
to be business minded which includes that companies are profitable and have good
knowledge of the market. Some entrepreneurs see business as a lifestyle but compa-
nies must be profitable. Furthermore, owners and employees should be able to earn a
decent living in any business.
The location of growth areas are not much discussed in the interview material. How-
ever, GIS visualisation and analyses can provide very detailed information. In addi-
tion, the data we have with all businesses in the region can be further analyzed with
database routines and with Excel.
Factors that are favourable to growth include attitudes, even if there are obstacles in
that area. People need to have adequate knowledge and skills. Companies may realize
it difficult to find people with the right skills. The researcher's experience in the con-
33

34. struction industry and other industries is that employers want to avoid having to train
new staff too much. Staff in high demand has several years of professional experi-
ence. This is a major barrier for young people. The infrastructure is good in the re-
gion which is favourable to growth.
Networks foster entrepreneurship and growth. Small companies can be stronger and
create new business opportunities by participating in networks, e.g., in the construc-
tion industry. Collaboration between municipalities and enterprises and between en-
terprises of different kinds and sizes is also crucial. For example, large companies’
resources come in handy for small businesses working with large companies. The
flexibility of small firms is an asset in this type of cooperation.
The main obstacles to growth are probably a lack of capital and attitudes. The indus-
trial culture and traditions (bruksandan) make it hard to think as entrepreneurs and
managers. Furthermore, an obstacle is that companies cannot find employees with the
proper knowledge and skills even if there is unemployment in the region.
There are many actors who are involved in growth issues. Western Mälardalen has
many networks mentioned in the interviews in comparison to the Sixth AP Fund's
material (9 regions). One reason may be that the project reported in the Sixth AP
Fund's materials has been based on regional growth programs, which illustrates the
value of performing interviews.
In the area of funding Almi, banks and the EU are the most important players. Mu-
nicipalities are key agents on many levels illustrated by the interviews. Collaboration
with university colleges and universities in the region could be developed significant-
ly. For example, business students examine case studies from the U.S.A. when there
are very interesting enterprises in the region to learn from. University colleges and
universities can contribute with knowledge to business if the contributions are not too
theoretical.
The population has not changed dramatically in recent years. The region's population
is aging. Young people move to education and work in larger towns, but some move
back when they found families. Western Mälardalen is part of a dynamic region
where commuting is constantly developing.
Based on the analyses performed by Arena for growth (Surahammar is not included) it
is noted that entrepreneurship is low relative to comparable municipalities. There are
relatively few university graduates in the region. The prices of housing (villas) are
comparable to the average, but the construction of new houses is not a strong area for
the region.
The region has more than 7,000 companies registered. Many companies are small but
a few large companies employ many people. The dominant business sector is Manu-
facturing & Industrial. Construction, Design & Fitting Operations is also important as
shown by data and interviews. The service industry is significant. Among new com-
panies services are significant.
34

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