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EY’s Attractiveness ProgramNordics 2017

Opportunity and potential

Contents 3 Foreword

4 Executive summary

8 Nordics

16 Denmark

18 Finland

20 Norway

22 Sweden

3

ey.com/nordicattractiveness

EY’s Attractiveness Program | Nordics | 2017

Foreword

I am delighted to welcome you to the 2017 Nordics Attractiveness Report, which examines the evolving performance of the Nordics as a destination for foreign direct investment (FDI). Our evaluation of FDI in the Nordics is based on the EY European Investment Monitor (EIM), EY’s proprietary database, produced in collaboration with Oxford Intelligence. This database tracks those FDI projects that have resulted in the creation of new facilities and new jobs. By excluding portfolio investments and M&A, it shows the reality of investment by foreign companies across the Nordic countries.

As a part of EY’s wider attractiveness program, this report continues our long history of sponsoring research into cross-border trade, reflecting our desire to encourage an open dialogue between business leaders, investors and policy makers. In launching the Nordics Attractiveness Report for the first time this year, we hope to stimulate more focused discussions within the public and private sectors on how to maximize the Nordics’ economic performance.

We hope this report will help our readers better understand and recognize the Nordics’ economic successes, and to reinforce its foundations. As we continue this report over future years, we at EY look forward to contributing in that process.

Ragnar GustaviiNordics Managing Partner

Markets and Accounts

http://www.ey.com/nordicattractiveness

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Executive summary


Executive summary

FDI in the Nordics rebounded strongly and hit a record high in 2016…

328projects

up31%

2016

It was a peak year in terms of foreign direct investments into the Nordics, securing a record 328 projects, up 31% from 2015

… however FDI job creation has fallen despite growth across Europe as a whole

2,441 2,950 2,760 3,410 2,483

2014 2015 20162012 2013

-27%

Due to the mix of projects secured in the Nordics, FDI created 2,483 jobs in 2016, down 27%

In assessing the overall performance of the Nordics in 2016 for attracting FDI, it has been a year of ups and downs.

In terms of the ups, the number of FDI projects initiated by foreign investors rebounded strongly and climbed to a record high 328, outperforming the growth experienced across Europe as a whole by as much as double. This is a great accomplishment and demonstrates the ability of the Nordics to attract and sustain appeal to foreign investors.

However, latest figures also reveal that this increase in projects has not led to the creation of more jobs, rather the contrary. Despite Europe as a whole witnessing an upsurge in FDI employment in 2016 – continuing a steady uptrend since 2013 – the Nordics saw employment fall by almost a third from the previous year. As a result, the Nordics’ market share of all FDI employment secured in Europe fell to its lowest figure in ten years. While this could be viewed as a cause for concern, it likely signals the evolving mix of projects secured, as well as shifts in the Nordic labor market away from large numbers of low-skilled workers to fewer, knowledge-intensive roles.

Nevertheless, the Nordics remains largely successful in attracting FDI, and has clear potential and opportunities to sustain that success going forward. Through its well-developed digital and logistical infrastructures, skilled labor forces and stable legal and regulatory environments, the Nordics is well positioned to capture the tremendous upside of business-orientated digital technologies. This is supported by recent findings of the European Commission’s Digital Economy and Society Index, which concluded that Nordic countries have the most advanced and competitive digital economies in Europe1.

As the adoption of robotics, artificial intelligence and Internet of Things continues to permeate across all industries and activities, the Nordics must continue building on its strong digital position. As competition increases, the Nordic countries must intensify their focus on key growth sectors and nurture talent and innovation to remain the destination of choice for foreign investors.

Nordics’ attractiveness in 2016: key facts and figures

1 https://ec.europa.eu/digital-single-market/en/desi#desi-scores-by-dimension

Nordics’ attractiveness in 2016: the reality

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… however the majority of foreign investment arose from intra-European FDI flows

69%

European companies combined accounted for 69% of all FDI projects initiated in the Nordics in 2016, up from 66% from the previous year, and 53% of all FDI jobs, up from 35% from the previous year

Finland tops the Nordic country rankings for the fifth successive year in number of FDI projects secured…

FinlandDenmark

Sweden

For the fifth year running, Finland secured the greatest number of FDI projects launched in the Nordics, with 133, up 27% from 2015

… while Denmark continues to lead the Nordic countries for FDI job creation…

SwedenDenmark Finland

40% 29% 28%321

Denmark captured 40% of all FDI jobs created in the Nordics, down from 59% in 2015

… though only Norway and Sweden managed growth in both FDI projects secured and employment created

FDI projects in the Nordics FDI job creation in the Nordics

Country 2015 2016 Evolution Country 2015 2016 Evolution

1 Finland 105 133 27% 1 Denmark 2,001 999 -50%

2 Sweden 51 90 76% 2 Sweden 679 717 6%

3 Denmark 63 72 14% 3 Finland 723 700 -3%

4 Norway 31 33 6% 4 Norway 7 67 857%

US investors were responsible for the largest proportion of FDI into the Nordics in 2016…

16%

84%

37%

63%

Other

Other

US

US

Projects

Job creation

US companies accounted for 16% of all FDI projects launched in the Nordics in 2016, down from 17% in 2015, as well as 37% of all FDI employment, down from 47% the previous year


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Executive summary


Top destination countries in Europe by FDI projects Top destination countries in Europe by FDI job creationCountry rank 2015 2016 % change

(2016 vs. 2015)Country rank 2015 2016 % change

(2016 vs. 2015)1. United Kingdom 1,065 1,144 7% 1. United Kingdom 42,336 43,165 2%

2. Germany 946 1,063 12% 2. Poland 19,651 22,074 12%

3. France 598 779 30% 3. Germany 17,126 19,961 17%

4. Spain 248 308 24% 4. Romania 12,746 17,545 38%

5. Poland 211 256 21% 5. France 13,639 16,980 24%

6. Netherlands 219 207 -5% 6. Serbia 10,631 16,396 54%

7. Russia 201 205 2% 7. Russia 13,672 15,064 10%

8. Belgium 211 200 -5% 8. Czech Republic 9,332 14,292 53%

9. Ireland 127 141 11% 9. Spain 7,126 12,969 82%

10. Turkey 134 138 3% 10. Hungary 11,741 12,450 6%

11. Finland 105 133 27% 27. Denmark 2,001 999 -50%

15. Sweden 51 90 76% 28. Sweden 679 717 6%

18. Denmark 63 72 14% 29. Finland 723 700 -3%

28. Norway 31 33 6% 36. Norway 7 67 857%

Others 873 1,076 23% Others 56,256 66,294 18

Total 5,083 5,845 15% Total 217,666 259,673 19%

EY European Investment Monitor (EIM), 2017

An increasing number of expansion projects were launched in the Nordics in 2016…

2014 2015 2016

8%13% 15%

Projects involving the expansion of existing operations accounted for 15% of all FDI projects in 2016, continuing a steady uptrend since 2014

…with 31% of total FDI going to software and B2B services

Software55

B2B services46

31%of Nordic FDI

The software sector rebounded strongly and regained its position as the single biggest source of FDI in the Nordics in 2016, launching 55 projects, up 83%, with business services being the next most active, launching 46 projects, up 35%

Chinese investors showed a resurgence of interest in the Nordics in 2016, launching 17 FDI projects…

+143%

2016CHINA

Chinese companies initiated 17 FDI projects in the Nordics, up 143%, with Finland capturing over half of these

… as appeal from Indian, Russian and Japanese investors wanes

2016-

40%

RUSSIA

2016-

55%

INDIA

2016-

33%

JAPAN

Investors from India, Russia and Japan collectively launched 12 FDI projects in the Nordics, down 43% from 2015

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Nordics


NordicsFDI in the Nordics reached new peaks in 2016…Foreign direct investors announced an impressive 328 new projects in the Nordics in 2016, up 31% from the previous year. This growth was over double that witnessed across Europe, which rose 15% from 2015, and is the best growth recorded in the Nordics since 2011. While all Nordic countries saw an increase in the number of FDI projects initiated during 2016, Sweden experienced an extremely impressive upsurge, with 90 new projects launched, up 76% from 2015. This performance placed Sweden as the top growth performer by number of FDI projects among the top 20 European countries.

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FDI projects captured over the last 10 years — Europe and the Nordics

Nordics Europe


… as Finland remains top Nordic destination…Finland continued its dominance as the leading Nordic country in securing FDI projects, with 133 projects initiated, up 27%. This means that Finland has now outperformed Denmark, Norway and Sweden for the fifth consecutive year in its ability to attract FDI projects. Finland’s strong performance also saw it placed as the 11th highest recipient of FDI projects across Europe, while Sweden and Denmark placed 15th and 18th respectively. Norway placed 28th, down one place in the European rankings from 2015.

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FDI projects captured by the Nordic countries over the last 10 years

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…though FDI job creation has fallen Nordic-wide results for job creation were down from 2015 figures, with employment generated through FDI resulting in 2,483 new jobs, down 27%. While the task of calculating FDI job creation accurately is a difficult one, these figures are in contrast to the rise in FDI jobs created across Europe in 2016, up 19% from the previous year. Additionally, the average Nordic FDI project only delivered eight jobs, down from 14 in 2015. This is in part due to the mix of projects secured and shifts in the labor market away from large numbers of low-skilled workers to fewer, highly skilled roles that deliver increased value to the economy. Manufacturing projects, which historically have created the most jobs per project in the Nordics, today form a smaller percentage of overall FDI employment.

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Employment created through FDI over the last 10 years - Europe and the Nordics

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At a country level, only Norway and Sweden experienced increases in FDI job creation from 2015. A big contributory factor of the Nordics’

underwhelming performance in FDI employment was the sharp fall experienced in Denmark, with 999 FDI jobs created in 2016, down 50% from the previous year. However, this decline is largely explained by the smaller contribution of jobs created in Denmark’s software sector (down 55%), where 2015 figures were boosted by a single large investment that created 900 jobs.

While the number of FDI jobs secured by Denmark in 2016 ensured it retained its place as Nordic leader for employment, it also means that no Nordic country is represented in the top 20 European destination countries by FDI job creation. In this list, Denmark, Sweden and Finland rank 27th, 28th and 29th respectively, while Norway ranks 36th.


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Nordics


The number of FDI projects

initiated by foreign investors in

the Nordics rebounded strongly

and climbed to a record high

— outperforming the growth

experienced across Europe as a

whole by as much as double.

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Nordics


USA remains the largest country investor…As has been the case historically, American companies were responsible for the largest proportion of foreign direct investments into the Nordics in 2016. Investors from the US signaled continued faith in the Nordic market and initiated 51 projects, up 21% from the previous year. However, this resulted in the creation of 916 FDI related jobs, down 43% from 2015, despite US investors creating 14% more jobs across Europe than the previous year.

A breakdown of the top five countries generating FDI projects in the Nordics in 2016 reveals that the US, Sweden, the UK, Germany and Denmark accounted for 54% of all activity. In addition to being the Nordics’ second largest investor for FDI projects in 2016, Sweden was also the tenth largest initiator of FDI projects across the whole of Europe. Of the Nordics’ top five country investors of FDI, only Denmark initiated a reduced number of FDI projects in 2016 compared to the previous year.

16%

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Countries of origin for FDI projects into the Nordics, 2016

USA

Sweden

UK

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Denmark

Norway

China

Finland

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… while European investment becomes increasingly important…While the US topped the country rankings for initiating new projects in the Nordics, the majority of foreign investment in 2016 arose from intra-European FDI flows. European companies collectively accounted for 69% of all FDI projects initiated in the Nordics, up from 66% the previous year. In comparison, European countries as a whole received just 55% of FDI inflows from European investors in 2016; a variance largely explained by greater investment from American, Japanese and Canadian companies. This reveals that the Nordic countries are more heavily reliant on European-originated FDI as a source of projects than Europe as a whole.

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Origin of all Nordic FDI projects by global region, 2007-2016

Latin America & Caribbean

Rest of AmericaAfrica

JapanIndia

Asia-PacificMiddle East

Rest of EuropeChina

USWestern Europe


… as Chinese FDI into Nordics rebounds Chinese investors renewed interest in the Nordics in 2016, launching 17 FDI projects, up 143% from the previous year. Of the 17 projects initiated by Chinese companies, Finland alone

secured 53% of these. Chinese companies invested across a diverse range of sectors, though a third of all FDI projects were initiated within the electronics and construction sectors. Interest from investors in India, Russia and Japan in 2016 however waned,

with these three countries collectively launching 12 FDI projects in the Nordics, down 43% from the previous year, with employment creation down 65%.


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Nordics


FDI by activity and sector: an ongoing digital transformationThe activity types of FDI projects launched by investors in the Nordics help to reveal what is happening in the demand-driven economy. In 2016, the Nordics attracted a record 221 sales and marketing offices, up 39% from 2015, outperforming the growth witnessed across Europe as a whole at 29%. Sales and marketing offices made up 67% of all FDI projects in 2016, up from 64% in 2015. Although it is difficult to determine whether sales and marketing offices create significant value to the Nordic economy – as in many cases they involve foreign suppliers selling to Nordic customers with marginal domestic value add – deeper analysis shows that the majority of such projects were launched in the software and business services sectors. Investments in these key growth sectors are largely positive and serve to strengthen the credibility of the Nordics’ offer in these industries.

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Top five types of FDI project activities in the Nordics, 2016

Sales & Marketing Manufacturing Research & DevelopmentLogistics Internet Data Center


1 http://ec.europa.eu/eurostat/statistics-explained/index.php/File:Estimated_hourly_labour_costs,_2016_(EUR)_YB17.png

In addition to the number of sales and marketing offices secured, the Nordics also outperformed European growth for the number of projects related to manufacturing plants and R&D centers, up 42% and 11% respectively. Despite operations in the Nordics generally being more expensive as a result of some of the highest labor costs in Europe1, these results suggest they remain cost competitive. The number of logistics centers launched also rose, up 73%, reflecting the Nordics’ strong online focus as companies seek to increasingly smooth flows of goods, reduce delivery times and extend market reach. Additionally, foreign investors initiated seven internet data centers in the Nordics, equaling

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Software FDI projects captured by Nordic countries, 2007-2016

Denmark Finland Norway Sweden


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the previous peak year of 2013. Low power costs, high connectivity, natural cooling efficiencies and recent government incentives mean that the Nordic countries offer a compelling offer to investors looking to establish data centers abroad.

The two leading FDI sectors of software and business services show the scale and breadth of the ongoing digital transformation witnessed in the Nordics. The software sector regained its position as the Nordics’ single biggest source of FDI in 2016, launching 55 projects, up 83%. This growth is roughly seven times that seen across Europe, and demonstrates the Nordics’ continued ability to attract significant investment in this key growth sector despite a fierce competitive landscape.

Business services, which includes many companies facilitating the digital transition, was the next most active sector for FDI in the Nordics. In 2016, the number of projects in this area rose 35%. This growth is in part driven by opportunities for digital consulting services, as well as recent EU reform legislation that requires mandatory audit firm rotation. Together software and business services account for 31% of Nordic FDI, a figure higher than Europe-wide figures where a quarter of FDI goes into software and business services. These results signify that global investors continue to regard the Nordics’ digital-savvy workforce as a vital asset.

Market share

67% 3%

38% 3%

50% 4%

50% 4%

86% 4%

367% 4%

6% 5%

67% 6%

35% 14%

83% 17%

% change over 2015

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Business Services

Construction

Machinery & Equipment

Utility supply

Electronics

Telecommunications & Post

Wholesale

Insurance & Pension

Food

Top 10 sectors by FDI projects in the Nordics, 2016


Other sectors demonstrating strong growth in the Nordics in 2016 measured by number of FDI projects include construction, utility supply and electronics. After software and business services, construction was the third most active sector, with 20 projects launched, up from 12 projects in 2015, reflecting the current building boom across the Nordics and particularly in Sweden. The utility supply sector launched 14 FDI projects, up from three the previous year. This growth reinforces the Nordics’ reputation as a leader in clean technology and renewable energy solutions. The number of electronics FDI projects also rose,

with 13 investments initiated, up from seven the previous year.

Meanwhile, 15% of FDI projects launched in the Nordics last year involved the expansion of existing operations, up from 13% in 2015 and 8% in 2014. While the market share of expansion projects in the Nordics is only half of that recorded across Europe as a whole in 2016, this moderate uptrend could suggest that foreign investors are finding increasing success in the Nordics.


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Denmark


DenmarkDenmark rebounds positively from 2015, but slips within the Nordics in terms of attractiveness indicators

At a country level, figures show that Denmark secured 72 FDI projects in 2016, representing a 14% increase from 2015. However, this rate of growth underperformed against the Nordic average of 31%. In terms of market share, Denmark captured 22% of FDI projects initiated in 2016 in the Nordics, down 3% from the previous year. This performance saw Denmark slip to third position in the Nordics for number of FDI projects launched (behind Finland and Sweden) for the first time since 2011.

For the second year running, Denmark’s FDI employment numbers were the highest of all the Nordic countries in 2016, resulting in 999 new jobs. However, this represented a decrease of 50% from the previous year. This decline is largely explained by the smaller contribution of jobs created in the software sector (down 55%), where figures were boosted in 2015 by a large investment that created 900 jobs. In terms of market share, Denmark captured 40% market of Nordic-wide FDI employment, down from 59% in 2015.

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Countries of origin for FDI projects into Denmark, 2016

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FDI by origin, activity and sector An analysis of the countries of origin for FDI projects in 2016 reveals that the US, the UK and Sweden combined were responsible for initiating four out of every ten projects in Denmark. The US tops the country rankings with 13 FDI projects initiated in 2016

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(down 13%), followed by the UK with 9 projects (up 13%) and Sweden in third place with 7 projects (up 40%). In terms of FDI job creation, US investors accounted for 54%, creating 916 jobs in 2016 (down 54%).

The most significant industry generating investment into Denmark in 2016 was finance and business services. This industry alone accounted for 44% of all FDI projects initiated and 53% of job creation. Within finance and business services, 32 FDI projects were initiated in 2016 (up 28%), creating 530 new jobs (down 50%).

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In 2016, foreign investors viewed Denmark as the most attractive Nordic country for software projects, with 20 investments initiated, up from six projects in 2015. A significant factor here is likely to be Denmark’s building reputation as a unique innovation laboratory, helped through the clustering of large and recent investments made by global IT companies.

The second largest industry in Denmark for attracting FDI investment was manufacturing, which accounts for 29% of all FDI projects, up 5% from the previous year. However, this

growth underperformed both against Nordic and European averages, 35% and 13% respectively, and is the third straight year of relatively flat growth in Denmark.

In terms of the types of activities attributed to FDI projects across Denmark in 2016, the number of sales and marketing offices, headquarter offices and internet data centers all rose.

Of the 72 FDI projects secured by Denmark in 2016, 94% of these

were “new” investments rather than expansions of existing investments. This is higher than the Nordic average, where 85% of FDI projects launched last year involved creation of new facilities.


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Finland


FinlandFinland builds on its recent successes in attracting FDI with a record performance Headline figures show that the total number of FDI projects secured by Finland in 2016 increased to 133 investments, representing an increase of 27% on projects recorded in 2015. Notably, the Uusimaa area in Finland - including the capital and its surroundings – ranked as the ninth highest metropole region for FDI projects across Europe, with 94 projects launched, up 45% from the previous year. Finland captured 41% of FDI projects initiated in the Nordics in 2016, down 1% from the previous year.

Finland’s performance in job creation ranked third of all the Nordic countries in 2016, with reported employment generated through FDI resulting in 700 new jobs. While this represented a decrease of 3% from the previous year, it demonstrates stable recovery from the low figures recorded in 2014. In securing 700 jobs, Finland achieved a 28% market share of Nordic-wide FDI employment, up from 21% in 2015.

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FDI by origin, activity and sector An analysis of the countries of origin for FDI projects in 2016 reveal that Sweden, the US, Germany and China together were responsible for initiating a little over half of all projects initiated in Finland. Sweden tops the country rankings with 32 FDI projects initiated in 2016 (up 113%), followed by the US with 17 projects (up 6%) and Germany in third place with 12 projects (up 9%). Interest from Chinese investors rebounded in 2016, with nine projects launched, up from one in 2015. In terms of FDI job creation, US investors alone accounted for 45%, creating 312 jobs in 2016 (up 333%).

In 2016, the manufacturing and finance and business services industries generated the majority of foreign investment into Finland, with both recording peak years in terms of number of FDI projects launched. These two industries alone accounted for 77% of all FDI projects and 71% of job creation.

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Within the manufacturing industry, foreign investors initiated 61 FDI projects in 2016, up 36%. Electronics was the most active sector within manufacturing, with nine projects launched, up from four projects the previous year. Foreign investors continue to be attracted to Finland’s high quality supply of scientists and engineers, with the country’s skilled and cost competitive workforce remaining a key determining factor affecting investments decisions. As evidence of this, Finland secured over 50% of all R&D facilities built in the Nordics in 2016. In addition, continuing structural changes in the ICT sector has increased the availability of skilled resources, further

strengthening Finland’s appeal to foreign investors.

In finance and business services, foreign investors launched the highest number of FDI projects in the software sector, with 15, up 67% from 2015. However, this is only half the number of projects launched in comparison to 2014, and could reveal the increasing competitiveness of Denmark and Sweden.

Within the construction sector, foreign companies launched seven projects, up from five projects in 2015 and up from three in 2014. This growth reflects greater levels of consumer and investor confidence as the Finnish economy recovers, with high activity in the residential sub-sector driven by increased market demand and healthy comparative returns on investment for construction companies. Looking forward however, Finland’s construction sector is expected to cool as housebuilding demands peak, though this could be buoyed by

increased investment in energy and industrial projects.

In terms of the activities undertaken by FDI projects across Finland in 2016, the number of sales and marketing office projects, manufacturing plant projects and shared service centers all rose. Sales and marketing office related activities rebounded particularly strongly, with 82 projects launched, up 55%.

Additionally, 80% of the 133 FDI projects secured by Finland were “new” investments rather than expansions of existing investments. This is lower than the Nordic average and could suggest that foreign investors are finding Finland to be the most appealing Nordic country for expanding existing activities to satisfy growing demand, market share or both.


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Norway


NorwayNorway makes steady if not unspectacular progress with modest gains in projects and jobsFigures from 2016 show that the total number of FDI projects secured by Norway increased to 33 investments, representing an increase of 6% from the previous year. In terms of market share, Norway captured 10% of the FDI projects initiated in the Nordics in 2016 (down from 12% in 2015). This means that the other Nordic countries have outperformed Norway since 2010 in securing FDI projects.

Norway’s performance in job creation growth was the highest of all the Nordic countries in 2016, with reported employment generated through FDI resulting in 67 new jobs. While this in part can be explained by better employment data coverage and reporting, it still represents a promising increase from the previous year and suggests a recovery is underway following a challenging 2015 in terms of FDI. In securing 67 new jobs, Norway achieved a 3% market share of Nordic-wide FDI employment.

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FDI by origin, activity and sector An analysis of the countries of origin for FDI projects in 2016 reveals that the UK, Sweden and the US together were responsible for initiating 55% of all projects in Norway. The UK tops the country rankings with eight FDI projects initiated in 2016 (up 300%), followed in joint second position by Sweden with five projects (down 29%) and the US with five projects (up 67%). Even though Denmark was only the fourth highest investor in number of FDI projects into Norway, the country accounted for 46% of FDI job creation, creating 31 jobs in 2016.

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Countries of origin for FDI projects into Norway, 2016

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For the first time since the financial crisis, manufacturing overtook finance and business services as the most significant industry generating investment into Norway in 2016. These two sectors alone accounted for 82% of all FDI projects and 88% of job creation.

Within the manufacturing industry, 14 FDI projects were initiated in 2016 (up 56%), with the machinery and equipment, publishing and electrical sectors attracting seven projects collectively. While the rest of the Nordic countries experienced healthy growth in the number of finance and business services projects initiated by foreign investors in 2016, Norway saw projects in this industry fall 19% from the previous year, despite upward growth since 2012. This can largely be attributed to the lower growth in software FDI projects launched, up 20% from 2015, despite Nordic wide growth surging by 78% since the previous year.

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as modest success in exploration activities, foreign investors perhaps unsurprisingly launched no projects in the oil and gas sector in 2016. This is in contrast to 2014 – a peak year – where seven projects were launched. As uncertainty surrounds the direction of oil and gas prices, many sanctioned oil and gas projects are being reworked to reduce costs and meet internal rates of return.

In terms of the activities undertaken by FDI projects across Norway in 2016, the number of sales and marketing office projects, internet data center projects, logistics facility projects, and education and training related projects all rose from the previous year.

Owing to the tumbling fall in global prices for hydrocarbons, as well


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Sweden


SwedenSweden produces a spectacular performance in attracting foreign investmentIn 2016, foreign direct investors launched a record 90 investments in Sweden. This represents an impressive growth of 76% over the number of projects recorded in 2015, and is the first increase since 2011. This rate of growth significantly outperformed Nordic growth, as well as outperforming every one of the top 20 destination countries by FDI projects in Europe. In terms of market share, Sweden captured 27% of FDI projects initiated in the Nordics in 2016, up from 20% the previous year.

Sweden’s performance in job creation growth was the second highest of the Nordic countries in 2016, with reported employment generated through FDI resulting in 717 new jobs. This represents an increase of 6% from the previous year. In securing 717 new jobs, Sweden achieved a 29% market share of Nordic-wide FDI employment, up from 20% in 2015.

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Number of FDI projects and jobs created in Sweden, 2007-2016



FDI by origin, activity and sector An analysis of the countries of origin for FDI projects in 2016 reveals that the US, the UK, Germany, Denmark and Finland together were responsible for initiating 61% of all projects in Sweden. The US tops the country rankings with 16 FDI projects initiated in 2016 (up 100%), followed by the UK with 14 projects (down 367%) and Germany in third place with 9 projects (up 29%). In terms of FDI job creation, German investors alone accounted

18%

16%

10%

9%9%

6%

4%

4%

24%

Countries of origin for FDI projects into Sweden, 2016

USA

UK

Germany

Denmark

Finland

Norway

China

Spain

Other


23



The most significant industries generating investment into Sweden in 2016 were finance and business services and manufacturing. These two sectors alone accounted for 72% of all FDI projects and 66% of job creation. Within finance and business services, 38 FDI projects were initiated in 2016, up 65%, with 27 projects launched in manufacturing, up 59% from the previous year. The growth experienced in both these industries means that Sweden greatly outperformed both its Nordic counterparts as well as most European countries.

In the finance and business services industry, the business services and software sectors accounted for over a third of all FDI projects launched in Sweden in 2016, with strong growth recorded in both. Business service related FDI projects were up a whopping 240% from the previous year, continuing an uptick since 2014, and software projects were up 37% from 2015. The automotive, chemicals, pharmaceuticals and scientific instruments sectors accounted for 44% of all FDI projects undertaken in the manufacturing industry. The third highest performing

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40

50

60

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80

90

100

2015 2016

Proj

ects

Contribution of leading industries for FDI projects into Sweden, 2016

Energy


Construction


Manufacturing



In 2016, Sweden attracted a record 60 sales and marketing offices, up 71% on 2015. Sales and marketing offices made up 67% of all FDI projects in 2016, up from 64% in 2015. There were also increases in the number of logistics and R&D centers created, with 11 projects (up from one the previous year) and seven projects (up from three in 2015) launched respectively.

Interestingly, Sweden captured 58% of all logistics facilities created in the

for 52%, creating 374 jobs in 2016, an increase in 364 jobs from the previous year.

industry by means of FDI investment was construction, with eight projects launched, up 167%.

Nordics. As companies increasingly consolidate their operations to cover regions from central locations, latest figures suggest that Sweden is the preferred centralized hub for pan-Nordic logistics solutions. Along with being the Nordics’ largest domestic market, foreign investors are likely attracted by Sweden’s wide selection of multi-modal logistics hubs, cutting-edge IT services and efficient customs handling to support demand for faster deliveries and omni-channel distribution solutions.


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