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‘Slowbalisation’: why Swedish companies are moving back home

Joacim Tåg, IFN, intervjuas av The Local om trenden med så kallad slowbalisation.

Tidningen uppmärksammar trenden med att svenska företag tar hem sin verksamhet.

"Costs, increasing automation, sustainability, and intellectual property are all drivers for Swedish companies to give up producing abroad, says Tåg. “I think a lot of companies have reversed their decisions after realising they made mistakes along the way,” he says. 

One reason for this is that rising labour costs in China and other Asian economies may mean what made economic sense a decade or so ago doesn’t look so sound now. “Big macroeconomic shocks like the Covid-19 crisis also provide an opportunity for companies to look over their operations and try to cut costs,” adds Tåg.

Furthermore, increasing automation makes labour costs a less critical factor for many firms. “That means you don’t need to produce in these countries any more, many of which have more unstable institutional environments that are not well-suited to large investments in automation and factories,” he says. Some companies may also be motivated by the ability to better protect their intellectual property by moving production home, he adds.

Costs, increasing automation, sustainability, and intellectual property are all drivers for Swedish companies to give up producing abroad, says Tåg. “I think a lot of companies have reversed their decisions after realising they made mistakes along the way,” he says. 

One reason for this is that rising labour costs in China and other Asian economies may mean what made economic sense a decade or so ago doesn’t look so sound now. “Big macroeconomic shocks like the Covid-19 crisis also provide an opportunity for companies to look over their operations and try to cut costs,” adds Tåg.

Furthermore, increasing automation makes labour costs a less critical factor for many firms. “That means you don’t need to produce in these countries any more, many of which have more unstable institutional environments that are not well-suited to large investments in automation and factories,” he says. Some companies may also be motivated by the ability to better protect their intellectual property by moving production home, he adds."

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