The State of Innovation in Sweden and its Regions

Abstract

The Northern Review 45 (2017): 57–75
https://doi.org/10.22584/nr45.2017.004

This article focuses on the successful Swedish tradition in the field of innovation, but also discusses the flip side of an innovation culture that honours only radical innovation. Related to this tradition is a preference to measure innovativeness through patent data. Both these traditions imply a disadvantageous position for regions and companies located outside our large metropolitan areas. One problem relates to the interest in understanding how different degrees of innovativeness relate to different degrees of economic and social effects—a challenge that patent data, only to a very limited degree, addresses. This means that patent data disregards the fact that also incremental innovations “new to the region” or “new to the firm” might be powerful routes to a more dynamic development path, especially in more peripheral regions. To overcome such shortcomings, other measures and approaches are needed. One such approach developed and presented in this article is based upon Data Envelopment Analysis (DEA) and the Malmquist productivity index—employing Swedish longitudinal data, the article illustrates how they may be utilized to assess and make sense of regional technological innovation. Besides offering an unconventional picture of the regional innovation performance in Sweden, this methodological approach also identifies the northernmost part of Sweden (the Norrbotten region) as a region with its own path-breaking development trajectory. The article is concluded by discussing the region of Norrbotten as an example of a region that has traditionally capitalized on the exploitation and processing of natural resources and how such a region may diversify into new sectors using concepts such as related variety and smart specialization.